Compute the total carrying amount of Marin patents

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Reference no: EM132749127

Question - Marin Industries has the following patents on its December 31, 2019, balance sheet.

Patent Item Initial Cost Date Acquired Useful Life at Date Acquired

Patent A $43,452 3/1/16 17 years

Patent B $16,560 7/1/17 10 years

Patent C $20,640 9/1/18 4 years

The following events occurred during the year ended December 31, 2020.

1. Research and development costs of $243,000 were incurred during the year.

2. Patent D was purchased on July 1 for $34,770. This patent has a useful life of 91/2 years.

3. 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, 2020. The controller for Marin estimates the expected future cash flows from Patent B will be as follows.

Year Expected Future Cash Flows

2021 $2,000

2022 2,000

2023 2,000

The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)

Required - Compute the total carrying amount of Marin' patents on its December 31, 2019, balance sheet.

Reference no: EM132749127

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