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Problem 10

The document records research and development costs and patent amortization expenses over multiple years. In 2018, $170,000 was spent on R&D and a patent was acquired for $24,000. In subsequent years, amortization expenses are recorded to allocate the patent cost over its useful life. In 2020, the remaining patent balance was sold for $12,400 and a new patent was acquired for $32,400. Amortization is then calculated on the new patent balance through 2023.

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17 views2 pages

Problem 10

The document records research and development costs and patent amortization expenses over multiple years. In 2018, $170,000 was spent on R&D and a patent was acquired for $24,000. In subsequent years, amortization expenses are recorded to allocate the patent cost over its useful life. In 2020, the remaining patent balance was sold for $12,400 and a new patent was acquired for $32,400. Amortization is then calculated on the new patent balance through 2023.

Uploaded by

ela kikay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Problem 10

A,
2018
Oct.1 Research and development costs 170,000
Cash 170,000

Patent 24,000
Cash 24,000

Dec.31 Amortization Expense -Patent 600


Patent 600
24000/10*3/12

2019
Dec.31 Amortization -Patent 2,400
Patent 2,400
24000/10

B.
2020
Jun.1 Patent 12,400
Cash 12,400

Dec.31 Amortization Expense-Patent 2,575


Patent 2,575

Cost 24,000
Old eul 10
Amortization, 05-31-2020 1,000

Carrying amount, 06-01-2020 32,400


new eul 12.0
Annual amortization 2,700
Amortization,12-31-2020 1,575

2021
Dec.31 Amortization expense-Patent 2,700
Accumulated Amortization 2,700

2022
Dec.31 Amortization expense-Patent 14,062.50
Patent 14,062.50

2023
Dec.31 Amortization expense-Patent 14,062.50
Patent 14,062.50

Carrying amount,01-01-2022 28,125


Remaining useful life 2
Amortization 14,062.50

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