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Skysong Industries has the following patents on its December 31, 2024, balance sheet Patent Item Patent A 2 Patent B Patent C 3. The following events occurred during the year ended December 31, 2025. Year 1 Research and development costs of $234,000 were incurred during the year. Patent D was purchased on July 1 for $47,196. 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 may have occurred at December 31, 2025. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. 2026 Initial Cost Date Acquired $41,616 $15,480 $16,320 2027 2028 3/1/21 7/1/22 Expected Future Cash Flows 9/1/23 $2,000 2,000 ||2,000 Useful Life at Date Acquired 17 years 10 years 4 years The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)

Skysong Industries has the following patents on its December 31, 2024, balance sheet Patent Item Patent A 2 Patent B Patent C 3. The following events occurred during the year ended December 31, 2025. Year 1 Research and development costs of $234,000 were incurred during the year. Patent D was purchased on July 1 for $47,196. 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 may have occurred at December 31, 2025. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. 2026 Initial Cost Date Acquired $41,616 $15,480 $16,320 2027 2028 3/1/21 7/1/22 Expected Future Cash Flows 9/1/23 $2,000 2,000 ||2,000 Useful Life at Date Acquired 17 years 10 years 4 years The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Skysong Industries has the following patents on its December 31, 2024, balance sheet Patent Item Patent A Patent B Patent C 3 Year The following events occurred during the yearended December 31, 2025. 2026 Initial Cost Date Acquired $41,616 $15,480 $16,320 1 Research and development costs of $234,000 were incurred during the year. Patent D was purchased on July 1 for $47,196. 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 may have occurred at December 31, 2025. The controller for 5 kysong estimates the expected future cash flows from Patent B will be as follows. 2027 2028 Expected Future Cash Flows $2,000 2,000 2,000 Click here to view factor tables. 3/1/21 7/1/22 9/1/23 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year) Total carrying amount $ Useful Life at Date Acquired 17 years 10 years 4 years eTextbook and Media Compute the total carrying amount of 5kysong's patents on its December 31, 2024, balance sheet (Round answer to Odecimal places eg. 5,125) Total carrying amount $ 234000 Compute the total carrying amount of 5kysong's patents on its December 31, 2025, balance sheet (Round present value factor calculations to 5 decimal places, eg. 125124 and final answer to Odecimal places eg. 58,971) 4568
Transcribed Image Text:Skysong Industries has the following patents on its December 31, 2024, balance sheet Patent Item Patent A Patent B Patent C 3 Year The following events occurred during the yearended December 31, 2025. 2026 Initial Cost Date Acquired $41,616 $15,480 $16,320 1 Research and development costs of $234,000 were incurred during the year. Patent D was purchased on July 1 for $47,196. 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 may have occurred at December 31, 2025. The controller for 5 kysong estimates the expected future cash flows from Patent B will be as follows. 2027 2028 Expected Future Cash Flows $2,000 2,000 2,000 Click here to view factor tables. 3/1/21 7/1/22 9/1/23 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year) Total carrying amount $ Useful Life at Date Acquired 17 years 10 years 4 years eTextbook and Media Compute the total carrying amount of 5kysong's patents on its December 31, 2024, balance sheet (Round answer to Odecimal places eg. 5,125) Total carrying amount $ 234000 Compute the total carrying amount of 5kysong's patents on its December 31, 2025, balance sheet (Round present value factor calculations to 5 decimal places, eg. 125124 and final answer to Odecimal places eg. 58,971) 4568
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