Problem 12-2 Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. Activity an 23.00 Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent applications patent granted June 30, 2011 Engineering activity necessary to advance the design of 73.100 precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent 81. 23.00 She Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit againsta competitor Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2016, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31. Compute the carrying value of patent No. 758-6002-1A on each of the following dates: ) December 30, 2015 el 2018 Problem 12-2 Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally itsells a patent. The history of Fields patent number 758-6002-1A is as follows. Cost 2008-2009 Jan. 2010 March 2010 Jan. 2011 $368,000 86,200 23,800 73.100 Nov. 2012 Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2011 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Dec. 2013 April 2014 July 2018 81,500 23,800 24,800 56,000 Flelds assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2016, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31. Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2016, it revised its useful fe estimate downward to remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31 Compute the carrying value of patent No. 758-6002-1A on each of the follow dates (a) December 31, 2011 (b) December 31, 2015 (c) December 31, 2016
