Question
1. A machine that cost $740,000 has an estimated residual value of $20,000 and an estimated useful life of eight years. The company uses straight-line
1. A machine that cost $740,000 has an estimated residual value of $20,000 and an estimated useful life of eight years. The company uses straight-line depreciation. Calculate its book value at the end of year 7.
Bluestone Company had three intangible assets at the end of the current year:
a. | A patent purchased this year from Miller Co. on January 1 for a cash cost of $3,600. When purchased, the patent had an estimated life of 12 years. |
b. | A trademark was registered with the federal government for $8,000. Management estimated that the trademark could be worth as much as $200,000 because it has an indefinite life. |
c. | Computer licensing rights were purchased this year on January 1 for $90,000. The rights are expected to have a six-year useful life to the company. |
Required: |
1. | Compute the acquisition cost of each intangible asset.
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