Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Marin Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Patent A Patent B $43,452 $16,560

image text in transcribedimage text in transcribedimage text in transcribed

Marin Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Patent A Patent B $43,452 $16,560 $20,640 3/1/16 7/1/17 9/1/18 Useful Life at Date Acquired 17 years 10 years 4 years Patent C The following events occurred during the year ended December 31, 2020. 1. 2. 3. Research and development costs of $243,000 were incurred during the year. Patent D was purchased on July 1 for $34,770. This patent has a useful life of 91/2 years. 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, 2020. The controller for Marin estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,000 2022 2,000 2,000 2023 Year 2021 2022 Expected Future Cash Flows $2,000 2,000 2,000 2023 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year Click here to view factor tables Part 1 Your answer is correct. Compute the total carrying amount of Marin' patents on its December 31, 2019, balance sheet. Total carrying amount $ 59834 Part 2 Compute the total carrying amount of Marin' patents on its December 31, 2020, balance sheet. Total carrying amount $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Frank Woods Business Accounting

Authors: Frank Wood. Sangster, Alan

12th Edition

0273759280, 9780273759287

More Books

Students also viewed these Accounting questions