The Befort Company field for a patent on a new type of machine. The application costs totaled P12,000. R&D costs incurred to create the machine were P75,000. In the year in which the company filed for and received the patent, it spent P20,000 in the successful defense of a patent infringement suit. Required 1. At what amount should the company capitalize the patent? 2. How would you determine the economic life of the patent? Note: Show the solution or formula of every problem.

The Befort Company field for a patent on a new type of machine. The application costs totaled P12,000. R&D costs incurred to create the machine were P75,000. In the year in which the company filed for and received the patent, it spent P20,000 in the successful defense of a patent infringement suit. Required 1. At what amount should the company capitalize the patent? 2. How would you determine the economic life of the patent? Note: Show the solution or formula of every problem.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 75P

See similar textbooks

Similar questions

How does a company record a patent worth 100,000 if: (a) it has just purchased it for 90,000? (b) the company has internally developed it at a cost of 50,000 and paid 1,000 in legal and filing fees?
The Befort Company field for a patent on a new type of machine. The application costs totaled P12,000. R&D costs incurred to create the machine were P75,000. In the year in which the company filed for and received the patent, it spent P20,000 in the successfuldefense of a patent infringement suit. Required1. At what amount should the company capitalize the patent?2. How would you determine the economic life of the patent?
The Befort Company field for a patent on a new type of machine. The application costs totaled P12,000. R&D costs incurred to create the machine were P75,000. In the year in which the company filed for and received the patent, it spent P20,000 in the successful defense of a patent infringement suit. Required 1. At what amount should the company capitalize the patent? 2. How would you determine the economic life of the patent?
Befort Company filed for a patent on a new type of machine. The application costs totaled $15,000. R&D costs incurred to create the machine were $75,000. In the year in which the company filed for and received the patent, it spent $25,000 in the successful defense of a patent infringement suit. Required 1. At what amount should the company capitalize the patent? 2. What are the factors used to determine the economic life of a patent?
The Befort Company field for a patent on a new type of machine. The application coststotaled P12,000. R&D costs incurred to create the machine were P75,000. In the year inwhich the company filed for and received the patent, it spent P20,000 in the successfuldefense of a patent infringement suit.
What is the total amount that Bryant Inc. should expense during the year (versus the company capitalizing the costs): 1. Purchased the cost of a patent from another company for $165,500. 2. Incurred $278,900 of Research and Development Costs. 3. Internal costs incurred to create a patent for $105,490. 4. Purchased a tradename for $97,300. 5. Goodwill from purchasing another division for $205,800.
New Co. received a patent on a new type of machine. The legal costs and the patent application costs totaled $180,000. R&D costs incurred to create the machine were $120,000. In the year in which the company received the patent, $25,000 was spent in the successful defense of a patent infringement suit. Required:What amount of patent costs, if any, should be capitalized as an intangible asset? $ __________
Thompson Company incurred research and development costs of $120,000 and legal fees of $50,000 to develop a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Thompson record as Patent Amortization Expense in the first year? O a. $5,000. O b. $8,000. O c. $17,000. O d. $6,000.
Ivanhoe Company incurred research and development costs of $ 90000 and legal fees of $ 30000 to develop a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Ivanhoe record as Patent Amortization Expense in the first year? O $0. O $ 3000. O $ 6000. O $ 12000.
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $1,600. When purchased, the patent had an estimated life of 8 years. b. A trademark was registered with the federal government for $10,000. Management estimated that the trademark could be worth as much as $240,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected to have a six-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.) Amortization…
For each of the following unrelated situations, calculate the annual amortization expense: a. A patent with a 15-year remaining legal life was purchased for $270,000. The patent will be commercially exploitable for another nine years. b. A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $42,300 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 18 years and is currently worth $378,000. c. A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for four years was obtained at a cost of $63,000. Satisfactory sales performance over the four years permits renewal of the franchise for another four years (at an additional cost determined at renewal) Annual expense a $ b $ C $