1.On September 30, 2011, Leeds LTD. acquired a patent in conjunction with the purchase of another company. The patent, valued at $6 million, was estimated to have a 10 year life and no residual value. Leeds uses the straight line method of amortization for intangible assets. At the beginning of January 2013, Leeds successfully defended its patent against infringement. Litigation costs totaled $500,000.
Required:
1. Calculate amortization of the patent for 2011 and 2012.
2. Prepare the journal entry to record the 2013 litigation costs.
3. Calculate amortization for 2013.
4. Repeat requirements 2 and 3 assuming that Leeds prepares its financial statements according to IFRS.