Compute the carrying value of patent no 758-6002-1a on each


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.

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Financial Accounting: Compute the carrying value of patent no 758-6002-1a on each
Reference No:- TGS02603113

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