Question
During 2013, Blue Corporation spent $145,440 in research and development costs. As a result, a new product called the New Age Piano was patented. The
During 2013, Blue Corporation spent $145,440 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $19,440 related to the patent were incurred as of October 1, 2013.
| Research and Development Expense | 145,440 | |
| Cash | 145,440 | |
| Patents | 19,440 | |
| Cash | 19,440 | |
| Amortization Expense | 486 | |
| Patents | 486 | |
| Amortization Expense | 1,944 | |
| Patents | 1,944 |
On June 1, 2015, Blue spent $10,080 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2015. Prepare all journal entries required in 2015 and 2016.
| Patents | 10,080 | |
| Cash | 10,080 | |
| Amortization Expense | ||
| Patents | ||
| Amortization Expense | ||
| Patents |
In 2017, Blue determined that a competitors product would make the New Age Piano obsolete and the patent worthless by December 31, 2018. Prepare all journal entries required in 2017 and 2018.
| Amortization Expense | xx,xxx | |
| Patents | xx,xxx |
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