Exercise 12-09
During 2016, Blue Corporation spent $145,440in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $19,440related to the patent were incurred as of October 1, 2016.
Exercise 12-09 During 2016, 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, 2016, 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, 2016. Your answer is correct. Prepare all journal entries required in 2016 and 2017 as a result of the transactions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 2016 Research and Development 145440 Cash 145440 (To record research and development expenses) 2016 Patents 19440 v Cash 19440 (To record legal expenses) 2016 Amortization Expense 486 Patents 486 (To record amortization expense) 2017 Amortization Expense 1944 Patents 1944 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXTYour answer is partially correct. Try again. On June 1, 2018, Blue spent $8,280 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2018. Prepare all journal entries required in 2018 and 2019. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 2018 Patents 10080 Y Cash x 10080 (To record patents) 2018 Amortization Expense 2088 Patents 2088 (To record amortization expense) 2019 v Amortization Expense X 2190 Patents x 2190 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXTYour answer is partially correct. Try again. In 2020, Blue determined that a competitor's product would make the New Age Piano obsolete and the patent worthless by December 31, 2021. Prepare all journal entries required in 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Amortization Expense 11406 Patents 11406 Click if you would like to Show Work for this question: Open Show Work
