Exercise 12-10 (Part Level Submission)

Splish Brothers Industries has the following patents on its December 31, 2016, balance sheet.

Patent Item		Initial Cost		Date Acquired		Useful Life at Date Acquired
Patent A		$44,472		3/1/13		17 years
Patent B		$17,160		7/1/14		10 years
Patent C		$23,040		9/1/15		4 years

The following events occurred during the year ended December 31, 2017.

1.		Research and development costs of $248,000 were incurred during the year.
2.		Patent D was purchased on July 1 for $26,106. This patent has a useful life of 91/2 years.
3.		As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent Bs value may have occurred at December 31, 2017. The controller for Splish Brothers estimates the expected future cash flows from Patent B will be as follows.

Year		Expected Future Cash Flows
2018		$1,800
2019		1,800
2020		1,800

The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)

(b)

Compute the total carrying amount of Splish Brothers' patents on its December 31, 2017, balance sheet.