The Randolph Company purchased a patent on June 1, 2016 for $1,188,000 with twelve years remaining on the patent’s legal life. It is estimated, however, that this patent will have a useful economic life of only nine years. Questions: 1. Amortization Expense For 2016 & 2017: 2. Balance Sheet Presentation on 9/30/2019: Note: Generally, no accumulated amortization account is generally used for intangibles, and thus they are presented on a single line at net book value. 3. How much can be received for the patent on 3/31/17? 4. Gain or loss before taxes if patent sold on 8/31/21 for $300,000? Where will this item be reported on the income statement? Dollar amount? Gain or loss? Location on income statement?
The Randolph Company purchased a patent on June 1, 2016 for $1,188,000 with twelve years remaining on the patent’s legal life. It is estimated, however, that this patent will have a useful economic life of only nine years. Questions:
1. Amortization Expense For 2016 & 2017:
2.
Note: Generally, no accumulated amortization account is generally used for
intangibles, and thus they are presented on a single line at net book value.
3. How much can be received for the patent on 3/31/17?
4. Gain or loss before taxes if patent sold on 8/31/21 for
$300,000? Where will this item be reported on the income statement?
Dollar amount?
Gain or loss?
Location on income statement?
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