Compute the carrying value of patent

Assignment Help Accounting Basics
Reference no: EM131716055

Problem - Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows.

Date Activity Cost
2008-2009 Research conducted to develop precipitator $368,000
Jan. 2010 Design and construction of a prototype 86,200
March 2010 Testing of models 23,800
Jan. 2011 Fees paid engineers and lawyers to prepare patent application;
   patent granted June 30, 2011 73,100
Nov. 2012 Engineering activity necessary to advance the design of the
   precipitator to the manufacturing stage 81,500
Dec. 2013 Legal fees paid to successfully defend precipitator patent 23,800
April 2014 Research aimed at modifying the design of the patented precipitator 24,800
July 2018 Legal fees paid in unsuccessful patent infringement suit against a
   competitor 36,000

Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2016, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31.

Compute the carrying value of patent No. 758-6002-1A on each of the following dates:

(a) December 31, 2011

(b) December 31, 2015

(c) December 31, 2018

Reference no: EM131716055

Questions Cloud

Describe the impact of these issues on your department : Describe the impact of these issues on your department. Describe how improved communication, collaboration, and teamwork can improve conditions in your departme
Discuss the developmental patterns you studied : Reflecting on the patterns of adolescent development described, how much did your adolescent peer group follow the developmental patterns you studied
What are the key principles of goal-setting theory : What are the key principles of goal-setting theory, self-efficacy theory, and reinforcement theory?
The funds in which the policy cash value is invested : In a variable life insurance policy, is the policyowner allowed to select the funds in which the policy's cash value is invested?
Compute the carrying value of patent : Compute the carrying value of patent No. 758-6002-1A on each of the following dates: December 31, 2011 and December 31, 2015
Developing a disaster plan to address hypothetical disaster : developing a disaster plan to address a hypothetical disaster that could plausibly strike the community that you observed for your Windshield Survey
Describe the scene and the principle players : describe the scene and the principle players, describe how the scene meets the principle
Assess the steps of finding the target audience : Assess the steps of finding the target audience in order to improve business strategies and audience interaction online.
Study of nursing home patients : In a study of nursing home patients, the following data were obtained for each patient; age, gender, previous smoking status (smoker or nonsmoker).

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd