Question
Patent #1: Acquired: January 1, 2017 Cost: $60,000 Life: Useful life 10 years Legal life 20 years The following transactions may affect intangible assets in
Patent #1:
Acquired: January 1, 2017
Cost: $60,000
Life: Useful life 10 years
Legal life 20 years
The following transactions may affect intangible assets in 2018.
Jan. 1 Paid $12,000 in legal costs to successfully defend Patent #1 against infringement by another company. The life of the patent was increased by 3 years.
Jan. May Developed a new product, incurring $30,000 in research and development costs, $10,000 in legal fees, and $10,000 in application fees with the U.S. Patent Office. Patent #2 for this product was granted on July 1 and is expected to have a useful life of 5 years and a legal life of 20 years.
Compute the book value of Patent #1 on December 31, 2018:
A | $66,000 | |
B | $65,550 | |
C | $65,864 | |
D | $58,667 | |
E | $60,500 |
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