Pinetree Manufacturing Company reports both equipment and patents in its statement of financial position. Required: a. Explain

Question:

Pinetree Manufacturing Company reports both equipment and patents in its statement of financial position.
Required:
a. Explain how the cost of each of these types of asset is determined.
b. If both the equipment and patents were purchased three years ago for $40,000 each and had estimated useful lives of 10 years, what amount would be reported for each of them in the statement of financial position at the end of the current period? Explain.
c. Financial analysts sometimes ignore when analyzing financial statements. Do you think this is appropriate? Explain.
Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...