At what amount should patents be reported


Problem: Kingbird Industries had one patent recorded on its books as of January 1, 2020. This patent had a book value of $249,600 and a remaining useful life of 8 years. During 2020, Kingbird incurred research and development costs of $90,000 and brought a patent infringement suit against a competitor. On December 1, 2020, Kingbird received the good news that its patent was valid and that its competitor could not use the process Kingbird had patented. The company incurred $93,500 to defend this patent.

Required: At what amount should patent(s) be reported on the December 31, 2020, balance sheet, assuming monthly amortization of patents?

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Accounting Basics: At what amount should patents be reported
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