Roocky reports the following patents on its December 31, 2017 Statement of Financial Position Useful life at Initial Cost Acquisition Date acquisition date 1,224,000.00 March 1, 2014 450,000.00 July 1, 2015 A 17 10 C 432,000.00 September 1, 2016 4 The following events occurred during the yearended December 31, 2018. |1. Research and development costs of 737,100 were incurred during the year. These costs were incurred prior to projects achieving economic viability. 2. Patent D was purchased on July 1 for 855,000. It has a remaining life of 9.5 years. 3. A possible impairment of Patent B's value may have occurred at December 31, 2018. This i December 31, 2019 60,000.00 December 31, 2020 60,000.00 December 31, 2021 60,000.00 The appropriate discount rate to be used for these cash flows is 8% Questions: 1. What is the carrying value of Roocky's patents on December 31, 2017? 2. What amount of impairment loss should be reported by Roocky for the year ended December 31, 2018? 3. What is the carrying value of Roocky's patents on December 31, 2018?

Roocky reports the following patents on its December 31, 2017 Statement of Financial Position Useful life at Initial Cost Acquisition Date acquisition date 1,224,000.00 March 1, 2014 450,000.00 July 1, 2015 A 17 10 C 432,000.00 September 1, 2016 4 The following events occurred during the yearended December 31, 2018. |1. Research and development costs of 737,100 were incurred during the year. These costs were incurred prior to projects achieving economic viability. 2. Patent D was purchased on July 1 for 855,000. It has a remaining life of 9.5 years. 3. A possible impairment of Patent B's value may have occurred at December 31, 2018. This i December 31, 2019 60,000.00 December 31, 2020 60,000.00 December 31, 2021 60,000.00 The appropriate discount rate to be used for these cash flows is 8% Questions: 1. What is the carrying value of Roocky's patents on December 31, 2017? 2. What amount of impairment loss should be reported by Roocky for the year ended December 31, 2018? 3. What is the carrying value of Roocky's patents on December 31, 2018?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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