7 Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents 8 certain types of air pollution. Fields does not manufacture or sell the products and processes 9 it develops. Instead, it conducts research and develops products and processes which it 10 patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally, it 11 sells a patent. The history of Fields patent number 758-6002-1A is as follows: 12 13 14 Date Activity 15 2011-2012 16 Jan. 2013 Design and construction of a prototype 17 March 2013 Testing of models 18 Jan. 2014 19 20 Nov. 2015 21 Cost Capitalize or Expense? precipitator 22 Dec. 2016 23 April 2017 24 Research conducted to develop precipitator Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2014 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented $384,000 I 87,600 42,000 I I 59,500 81,500 42,000 43,000 25 July 2021 Legal fees paid in unsuccessful patent infringement suit against 34.000 36 37 (a) December 31, 2014 38 39 40 26 27 28 Fields assumed a useful life of 17 years when it received the initial precipitator patent. On 29 January 1, 2019, it revised its useful life estimate downward to 5 remaining years. 30 Amortization is computed for a full year if the cost is incumed prior to July 1, and no 31 amortization for the year if the cost is incurred after June 30. The company's year ends 32 December 31. 33 34 Instructions 35 Compute the camying value of patent No. 758-6002-1A on each of the following dates: Costs to obtain patent, January, 2014 2014 Amortization Carrying Value as of December 31, 2014 59,500 3,500 56,000 41 42 43 44 45 46 47 48 (b) December 31, 2018 49 Carrying Value as of December 31, 2014 (from Part A) $ 56,000 50 2015 Amortization $ 3,500 51 2016 Amortization $ 3,500 52 Subtotal 53 Legal fees paid to successfully defend precipitator patent 49,000 42,000 54 Carrying Value as of December 31, 2016 91,000 6,500 55 2017 Amortization 6,500 56 2018 Amortization 6,500 57 Carrying Value as of December 31, 2018 78,000 58 59 60 61 62 of carrying values, etc.