Compute the carrying value of patent

Assignment Help Financial Accounting
Reference no: EM131807603

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

$384,000

Jan. 2010

Design and construction of a prototype

87,600

March 2010

Testing of models

42,000

Jan. 2011

Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2011

59,500

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

42,000

April 2014

Research aimed at modifying the design of the patented precipitator

43,000

July 2018

Legal fees paid in unsuccessful patent infringement suit against a competitor

34,000

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.

Instructions

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: EM131807603

Questions Cloud

Calculate the standard deviation of rent for ann arbor : While the housing market has not recovered, real estate investment in college towns continues to promise good returns.
What is the annual equivalent of her deposits : What is the annual equivalent of her deposits, and how much is on deposit after the 18th birthday? Contributed by Paul R. McCright, University of South Florida.
Francisco believes in planning ahead : Francisco believes in planning ahead. So he decides to find out how much he can draw from a retirement account each year for 30 years if he invests exactly
Why is ethical behavior so critical to practice of finance : Why is ethical behavior so critical to the practice of finance? What were the repercussions of their actions?
Compute the carrying value of patent : Compute the carrying value of patent No. 758-6002-1A on each of the following dates:(a)December 31, 2011.(b)December 31, 2015.
What is the present worth of his degree : If he earns an extra $10,000 annually for40 years,what is the present worth of his degree? Contributed by Paul R. McCright, University of South Florida.
Test the coach claim by critical value approach : Two basketball players on a school tea m are working hard on consistency of their performance . In particular, they are hoping to bring down the variance.
Compare impact of different religious beliefs and practices : Compare the impact of different religious beliefs and practices (choose three to four different religions) and how these affect the organizational culture.
Prepare a statement of revenues and expenses : Prepare a statement of revenues, expenses, and changes in fund net assets for the Water Utility Fund for the year ended June

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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