Freetown Manufacturing company acquired three patents in January 2016. The patents have different lives as indicated in the following schedule. Cost Useful Life Legal Life Patent A 125,000 10 17 Patent B272,500 57 Patent C656,200Indefinite17 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2017, the company unsuccessfully attempted to defend its right to Patent B. Legal fees of P127,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. Required: How much is amortization expense recorded on 12/31/17?___________ How much is the amount of write-down of patent B?_____________ Carrying value of patent A?___________ Carrying value of patent C?______

Freetown Manufacturing company acquired three patents in January 2016. The patents have different lives as indicated in the following schedule. Cost Useful Life Legal Life Patent A 125,000 10 17 Patent B272,500 57 Patent C656,200Indefinite17 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2017, the company unsuccessfully attempted to defend its right to Patent B. Legal fees of P127,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. Required: How much is amortization expense recorded on 12/31/17?_____ How much is the amount of write-down of patent B?_ Carrying value of patent A?_ Carrying value of patent C?__

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 1C: In examining Samson Manufacturing Companys books, you find on the December 31, 2019, balance sheet...

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Freetown Manufacturing company acquired three patents in January 2016. The patents have different lives as indicated in the following schedule. Cost Useful Life Legal Life Patent A 125,000 10 17 Patent B272,500 57 Patent C656,200Indefinite17 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2017, the company unsuccessfully attempted to defend its right to Patent B. Legal fees of P127,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. Required: 4. Carrying value of patent C?___________5. rules in answering the problem_____
Kingbird had one patent recorded on its books as of January 1, 2017. This patent had a book value of $129,600 and a remaining useful life of 6 years. During 2017, Kingbird incurred research and development costs of $203,500 related to this patent and was sued by a competitor to nullify the patent. On September 1, 2017, the Court found that Kingbird's patent was valid and that its competitor could not use the process Kingbird had patented. The company incurred $65,280 to defend this patent. At what amount should patent(s) be reported on the December 31, 2017, balance sheet, assuming monthly amortization of patents? Carrying amount 12/31/17 $
The Garnet Trading spent P1,440,000 in acquiring a patent on January 3, 2011. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. beginning of 2015, the company paid P180,000 for legal fees in a successful defense of the patent. On July 1, 2019, a competitor obtained rights to a patent which made Garnet's patent obsolete. How much is the loss from the patent obsolescence? The correct answer is a. 216,000 Please give me a solution to this answer.
Laguna Company acquired three patents in January 2005. The patents have different lives as indicated in the following schedule: Cost Remaining useful life Remaining legal life Patent A 2,000,000 10 8 Patent B 3,000,000 5 10 Patent C 6,000,000 Indefinite 15 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2005, the company successfully defended its right to Patent B. Legal fees of P800,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar- year basis. The amount of amortization that should be recognized for 2005 is 1,250,000 950,000 1,330,000 2,050,000
Laguna Company acquired three patents in January 2005. The patents have different lives as indicated in the following schedule: Cost Remaining useful life Remaining legal life Patent A 2,000,000 10 8 Patent B 3,000,000 5 10 Patent C 6,000,000 Indefinite 15 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2005, the company successfully defended its right to Patent B. Legal fees of P800,000 were incurred in this action. The companys policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. The amount of amortization that should be recognized for 2005 is A. 1,330,000 B. 1,250,000 C. 2,050,000 D. 950,000
Dragon Fruit Trading spent P1,440,000 in acquiring a patent on January 3, 2012. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. At the beginning of 2016, the company paid P180,000 for legal fees in a successful defense of the patent. On July 1, 2020, a competitor obtained rights to a patent which made Dragon Fruit's patent obsolete. How much is the loss from the patent obsolescence? * O P216,000 P243,000 P261,000 O P396,000 answer not given
Nieland Industries had one patent recorded on its books as of January 1, 2017. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2017, Nieland incurred research and development costs of $96,000 and brought a patent infringement suit against a competitor. On December 1, 2017, Nieland received the good news that its patent was valid and that its competitor could not use the process Nieland had patented. The company incurred $85,000 to defend this patent. At what amount should patent(s) be reported on the December 31, 2017, balance sheet, assuming monthly amortization of patents?
On January 1, 2015, Moose Co. purchased for $360,000 a patent that had been granted two years earlier. On January 1, 2017, legal costs of $64,000 were incurred in a successful defense of the patent. Assuming the maximum period allowable is used for patent amortization, what is Moose's patent amortization expense for 2017? $21,555 $20,000 $18,000 $24,000
Corporation was granted a patent on a product on January 1, 2004. To protect its patent. the corporation purchased on January 1, 2015 a patent on a competing product which was originally issued on January 10, 2011. The cost of the competing patent should be: a. amortized over a maximum period of 20 years. b. amortized over a maximum period of 16 years. c. amortized over a maximum period of 9 years. d. expensed in 2015 Explain each choices. Why is it not the answer or why it is the answer.
Safehouse Company was granted a patent on a product on January 1, 2011 with a 20-year useful life. To protect the patent, the entity purchased on January 1, 2021 for P4,500,000 a patent on a competing product which was originally issued on January 1, 2016. Because of the unique plant, the entity does not feel the competing patent can be used in producing a product. What amount should be recorded as amortization of the compéting patent for 2021? a. 450,000 b. 225,000 C. 300,000 d. 0.
apple Fruit Trading spent P1,440,000 in acquiring a patent on January 3, 2012. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. At the beginning of 2016, the company paid P180,000 for legal fees in a successful defense of the patent. On July 1, 2020, a competitor obtained rights to a patent which made apple Fruit’s patent obsolete. How much is the loss from the patent obsolescence? P216,000 P243,000 P261,000 P396,000 answer not given
In examining Samson Manufacturing Companys books, you find on the December 31, 2019, balance sheet the item, Costs of patents, 308,440. Referring to the ledger accounts, you note the following items regarding one patent acquired in 2016; There are no credits in the account, and the company has not recorded any amortization for any of the patents. There are three other parents issued in 2013, 2015, and 2016; all were developed by the staff of Samson. The patented articles are presently very marketable, but are estimated to be in demand only for the next few years. Required: Discuss the accounting issues related to the items included in the Patent account.