Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 12-11 Tones Industries has the following patents on its December 31, 2013, balance sheet. Initial Cost $53,448 $21,360 $31,680 Date Acquired Patent Item Patent
Exercise 12-11 Tones Industries has the following patents on its December 31, 2013, balance sheet. Initial Cost $53,448 $21,360 $31,680 Date Acquired Patent Item Patent A Patent B Patent C Useful Life at Date Acquired 17 years 10 years 4 years The following events occurred during the year ended December 31, 2014 1. Research and development costs of $236,720 were incurred during the year. 2. Patent D was purchased on July 1 for $31,578. This patent has a useful life of 91/, years 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2014. The controller for Tones estimates the expected future cash flows from Patent B will be as follows Expected Future Cash Flows Year 2015 2016 2017 $1,870 1,870 1,870 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started