RangeStar Telecommunications recently acquired a patent regarding a new telecommunications application. Additional equipment and a computer were purchased to begin making the application available to consumers. Details of the assets follow:

The company?s year-end is December 31 and it uses the straight-line method for all production assets including intangibles, calculated to the nearest whole month.

Required

1. Record amortization and depreciation at December 31, 2020, on the production assets, including the patent.

2. Assume that because a highly superior alternative telecommunications application became available from a competitor, RangeStar?s application no longer had value and was officially discontinued on January 27, 2024. The equipment was sold for $252,000 cash and the patent and computer were scrapped. Record the disposal of the assets.

Transcribed Image Text:

Date of Purchase Feb. 12/20 Feb. 12/20 Feb. 12/20 Est. Residual Est. Life 20 yrs 15 yrs 5 yrs Asset Cost $210,000 $-0- 56,000 -0- Patent Equipment Computer 320,600 79,800