Year Wildhorse Industries has the following patents on its December 31, 2024, balance sheet. 2026 2027 2028 (a) Patent Item Initial Cost Patent A Patent B Patent C (b) 1. 2. $44,064 The following events occurred during the year ended December 31, 2025. 3. $16,920 $22,080 Expected Future Cash Flows Research and development costs of $246,000 were incurred during the year. Patent D was purchased on July 1 for $45,030. 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 Wildhorse estimates the expected future cash flows from Patent B will be as follows. $2,150 2,150 2,150 Click here to view factor tables. The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Your answer is correct. Date Acquired 3/1/21 7/1/22 9/1/23 Total carrying amount $ Useful Life at Date Acquired 17 years 10 years 4 years Compute the total carrying amount of Wildhorse's patents on its December 31, 2024, balance sheet. (Round answer to O decimal places,e.g. 5,125.) * Your answer is incorrect. Total carrying amount $ 61,538 Compute the total carrying amount of Wildhorse's patents on its December 31, 2025, balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to O decimal places e.g. 58,971.) 89,857
Year Wildhorse Industries has the following patents on its December 31, 2024, balance sheet. 2026 2027 2028 (a) Patent Item Initial Cost Patent A Patent B Patent C (b) 1. 2. $44,064 The following events occurred during the year ended December 31, 2025. 3. $16,920 $22,080 Expected Future Cash Flows Research and development costs of $246,000 were incurred during the year. Patent D was purchased on July 1 for $45,030. 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 Wildhorse estimates the expected future cash flows from Patent B will be as follows. $2,150 2,150 2,150 Click here to view factor tables. The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Your answer is correct. Date Acquired 3/1/21 7/1/22 9/1/23 Total carrying amount $ Useful Life at Date Acquired 17 years 10 years 4 years Compute the total carrying amount of Wildhorse's patents on its December 31, 2024, balance sheet. (Round answer to O decimal places,e.g. 5,125.) * Your answer is incorrect. Total carrying amount $ 61,538 Compute the total carrying amount of Wildhorse's patents on its December 31, 2025, balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to O decimal places e.g. 58,971.) 89,857
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Year
2026
Wildhorse Industries has the following patents on its December 31, 2024, balance sheet.
2027
2028
(a)
Patent Item
Patent A
Patent B
Patent C
(b)
1.
2.
Initial Cost
3.
$44,064
$16,920
$22,080
The following events occurred during the year ended December 31, 2025.
Expected Future
Cash Flows
$2,150
2,150
2,150
Click here to view factor tables.
Research and development costs of $246,000 were incurred during the year.
Patent D was purchased on July 1 for $45,030. 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 Wildhorse estimates the expected future cash flows from Patent B
will be as follows.
Your answer is correct.
Date Acquired
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 $
3/1/21
7/1/22
* Your answer is incorrect.
9/1/23
Useful Life at Date Acquired
17 years
10 years
4 years
Compute the total carrying amount of Wildhorse's patents on its December 31, 2024, balance sheet. (Round answer to O decimal
places,e.g. 5,125.)
Total carrying amount $
61.538
Compute the total carrying amount of Wildhorse's patents on its December 31, 2025, balance sheet. (Round present value factor
calculations to 5 decimal places, e.g. 1.25124 and final answer to O decimal places e.g. 58,971.)
89,857
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