Sheridan Industries has the following patents on its December 31, 2024, balance sheet.(b)Patent ItemYearPatent A22026Patent B2027(a)Patent CThe following events occurred during the year ended December 31, 2025.1 Research and development costs of $235,000 were incurred during the year.Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 years.As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value mayhave occurred at December 31, 2025. The controller for Sheridan estimates the expected future cash flows from Patent Bwill be as follows.3.Show Transcribed Text2028Initial Cost$41,820$15,600$16,800Expected FutureCash Flows$2,0502,0502,050✓ Your answer is correct.Total carrying amountThe proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)Click here to view factor tables.Total carrying amount $Show Transcribed TextDate Acquired3/1/217/1/229/1/23x Your answer is incorrect.Compute the total carrying amount of Sheridan's patents on its December 31, 2024, balance sheet. (Round answer to O decimalplaces eg 5,125)Useful Life at Date Acquired17 years10 years4 yearsS552903109264,6Ć3Compute the total carrying amount of Sheridan's patents on its December 31, 2025, balance sheet. (Round present value factorcalculations to 5 decimal places, eg. 1.25124 and final answer to 0 decimal places eg. 58,971.)C

Intangible Assets -Assets that are recognised but lack physical substance and are not monetary are…

Sheridan Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C 1 2 Initial Cost 3. $41,820 $15,600 $16,800 Date Acquired 3/1/21 The following events occurred during the year ended December 31, 2025. Research and development costs of $235,000 were incurred during the year. Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 year As a result of reduced demands for certain products protected by Patent B 7/1/22 9/1/23 Useful Life at Date Acquired 17 years 10 years 4 years

Sheridan Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C 1 2 Initial Cost 3. $41,820 $15,600 $16,800 Date Acquired 3/1/21 The following events occurred during the year ended December 31, 2025. Research and development costs of $235,000 were incurred during the year. Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 year As a result of reduced demands for certain products protected by Patent B 7/1/22 9/1/23 Useful Life at Date Acquired 17 years 10 years 4 years

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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Post Company purchased a patent on January 1, 200X for $50,000. The patent has a useful life of 10 years. The accounting entry to record the patent amortization expense for the first year would be: Debit patent $5,000; credit accounts payable $5,000. Debit patent amortization expense $5,000; credit patent $5,000. Debit patent $50,000; credit accounts payable $50,000. Debit patent amortization expense $50,000; credit patent $50,000.
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Cullumber Limited organized late in 2022 and set up a single account for all intangible assets. The following summary shows the entries in 2023 (all debits) that have been recorded in Intangible Assets since then: Jan. 2: Purchased patent (8-year life) - $342,000 Mar. 31: Costs to search for new ways to apply patent that was purchased on Jan. 2 - $21,000 Apr. 1: Purchased goodwill (indefinite life) - $315,000 July 1: Purchased franchise with 10-year life; expiration date July 1, 2033 - $248,000 July 1: Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 - S 33,000 Aug. 1: Payment for copyright (5-year life) - $132,000 Aug. 1: Purchased trademark (3-year life) - $14,400 Aug. 1: Purchased customer lists (2-year life) S9, 600 Sept. 1: Research costs - $234,000 Total: $1,349,000
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