4 8 CO 1 Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain 2 types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns 3 the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. 5 6 7 Date: Activity: Cost: 2010-2013 Research conducted to develop precipitator $400,000 9 Jan 1. 2014 Fees paid engineers and lawyers to prepare patent 10 application patent granted Jan 1, 2014 960,000 11 Dec 31, 2016 Legal fees paid to successfully defend precipitator 12 patent 84,000 13 April 1 2017 Research aimed at modifying the design of the 14 patented precipitator 55.000 15 July 1 2021 Legal fees paid in unsuccessful patent infringement 16 suit against a competitor 34,000 17 18 Fields assumed a useful life of 20 years when it received the initial precipitator 19 patent. On January 1, 2019, it revised its useful life estimate downward to 6 20 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no 21 amortization for the year if the cost is incurred after June 30 The company's year ends December 31 22 23 Instructions: 24 (0) Compute the carrying value of patent No 758-6002.1A on December 31, 2014 25 N20 A B 6 D E G 1 On July 31, 2021, Mexico Company paid $3,370,000 2 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita 3 reported the following balance sheet at the time of the acquisition, 4 Current assets $800,000 Current liabilities $600,000 5 Noncurrent assets $2,700,000 Long-term liabilities $500,000 6 Total assets $3,500,000 Stockholders' equity $2,400.000 7 Total liabilities and stockholders' equity $3,500,000 8 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was 9 $850,000 higher than the book value. Over the next few months the divsion experienced operating 10 losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At 11 December 31, 2021. Conchita reports the following balance sheet information 12 Current assets 5500,000 13. Noncurrent assets (including goodwill recognized in purchase) $2,500,000 14 Current liabilities (5800.000 15 Long-term liabilities (5550,000) 16 17 It is determined that the fair value of the Conchita Division is $1,700,000 18 19 20 21 Instructions: 22 (0) Compute the amount of goodwill recognized if any, on July 31, 2021 23 24 4 8 CO 1 Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain 2 types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns 3 the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. 5 6 7 Date: Activity: Cost: 2010-2013 Research conducted to develop precipitator $400,000 9 Jan 1. 2014 Fees paid engineers and lawyers to prepare patent 10 application patent granted Jan 1, 2014 960,000 11 Dec 31, 2016 Legal fees paid to successfully defend precipitator 12 patent 84,000 13 April 1 2017 Research aimed at modifying the design of the 14 patented precipitator 55.000 15 July 1 2021 Legal fees paid in unsuccessful patent infringement 16 suit against a competitor 34,000 17 18 Fields assumed a useful life of 20 years when it received the initial precipitator 19 patent. On January 1, 2019, it revised its useful life estimate downward to 6 20 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no 21 amortization for the year if the cost is incurred after June 30 The company's year ends December 31 22 23 Instructions: 24 (0) Compute the carrying value of patent No 758-6002.1A on December 31, 2014 25 N20 A B 6 D E G 1 On July 31, 2021, Mexico Company paid $3,370,000 2 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita 3 reported the following balance sheet at the time of the acquisition, 4 Current assets $800,000 Current liabilities $600,000 5 Noncurrent assets $2,700,000 Long-term liabilities $500,000 6 Total assets $3,500,000 Stockholders' equity $2,400.000 7 Total liabilities and stockholders' equity $3,500,000 8 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was 9 $850,000 higher than the book value. Over the next few months the divsion experienced operating 10 losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At 11 December 31, 2021. Conchita reports the following balance sheet information 12 Current assets 5500,000 13. Noncurrent assets (including goodwill recognized in purchase) $2,500,000 14 Current liabilities (5800.000 15 Long-term liabilities (5550,000) 16 17 It is determined that the fair value of the Conchita Division is $1,700,000 18 19 20 21 Instructions: 22 (0) Compute the amount of goodwill recognized if any, on July 31, 2021 23 24