te downward to 5 remaining years. Ar e 30. The company's year ends Dece 150 000 60 000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Please select the answer from the given amount

te downward to 5 remaining years. Ar
e 30. The company's year ends Dece
150 000
60 000
Transcribed Image Text:te downward to 5 remaining years. Ar e 30. The company's year ends Dece 150 000 60 000
Expert Solution
Requirement 1:

Cost of patent purchased in Jan 2004 = $59500

Useful life of patent = 17 years

Amortisation amount = Cost of patent purchased / Useful life 

= 59500/17 = $3500

Carrying value of patent as on December 31, 2004 = Original cost of patent - Amortisation amount 

= 59500 - 3500 = $56000.

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