Exercise 12-10 Skysong 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 $42,024 3/1/13 17 years Patent B $15,720 7/1/14 10 years Patent C $17,280 9/1/15 4 years The following events occurred during the year ended December 31, 2017. 1. Research and development costs of $236,000 were incurred during the year. 2. Patent D was purchased on July 1 for $47,310. 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 Skysong estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2018 $2,100 2019 2,100 2020 2,100 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)

1. Compute the total carrying amount of Skysong patents on its December 31, 2016, balance sheet.

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