Skysong Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $41,616 3/1/21 17 years Patent B $15,480 7/1/22 10 years Patent C $16,320 9/1/23 4 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $234,000 were incurred during the year. 2. 3. 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.
Skysong Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $41,616 3/1/21 17 years Patent B $15,480 7/1/22 10 years Patent C $16,320 9/1/23 4 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $234,000 were incurred during the year. 2. 3. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Skysong Industries has the following patents on its December 31, 2024, balance sheet .
Patent Item
Initial Cost
Date Acquired
Useful Life at Date Acquired
Patent A
3/1/21
17 years
$41,616
$15,480
Patent B
7/1/22
10 years
Patent C
$16,320
9/1/23
4 years
The following events occurred during the year ended December 31, 2025.
1. Research and development costs of $234,000 were incurred during the year.
2. Patent D was purchased on July 1 for $47,196. This patent has a useful life of 91/2 years.
3. 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.
Transcribed Image Text:Skysong Industries has the following patents on its December 31, 2024, balance sheet.
Patent Item
Initial Cost
Date Acquired
Useful Life at Date Acquired
Patent A
$41,616
3/1/21
17 years
Patent B
$15,480
7/1/22
10 years
Patent C
$16,320
9/1/23
4 years
The following events occurred during the year ended December 31, 2025.
1.
Research and development costs of $234,000 were incurred during the year.
2.
3.
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education