Compute the total carrying amount of Metlock's patents on its December 31, 2025 balance sheet. (2024 carrying amount is $56,994.) Please don't give image format

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
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Compute the total carrying amount of Metlock's patents on its December 31, 2025 balance sheet. (2024 carrying amount is $56,994.) Please don't give image format
Metlock Industries has the following patents on its December 31, 2024, balance sheet.
Patent Item
Patent A
Patent B
Patent C
2.
3.
Year
2026
Initial Cost Date Acquired
The following events occurred during the year ended December 31, 2025.
2027
$42,432
$15,960
$18,240
1. Research and development costs of $238,000 were incurred during the year.
Patent D was purchased on July 1 for $44,346. This patent has a useful life of 9¹/2 years.
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, 2025. The controller for Metlock estimates the expected future cash flows from Patent B will
be as follows.
2028
Expected Future
Cash Flows
$2,200
3/1/21
2,200
7/1/22
2,200
9/1/23
Useful Life at Date Acquired
17 years
10 years
4 years
The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)
Transcribed Image Text:Metlock Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C 2. 3. Year 2026 Initial Cost Date Acquired The following events occurred during the year ended December 31, 2025. 2027 $42,432 $15,960 $18,240 1. Research and development costs of $238,000 were incurred during the year. Patent D was purchased on July 1 for $44,346. This patent has a useful life of 9¹/2 years. 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, 2025. The controller for Metlock estimates the expected future cash flows from Patent B will be as follows. 2028 Expected Future Cash Flows $2,200 3/1/21 2,200 7/1/22 2,200 9/1/23 Useful Life at Date Acquired 17 years 10 years 4 years The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)
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