Question $1$:

During Year $1,$ Burks Corporation spent $$510,000$ in research and development costs. As a result,

a new product called the New Age Piano was patented. The patent was obtained on October $1,$

Year $1,$ and had a legal life of $20$ years and a useful life of $10$ years. Legal costs of $$54,000$ related

to the patent were incurred as of October $1,$ Year $1.$

Instructions

a$.$ Prepare all journal entries required in Year $1$ and Year $2$ as a result of the transactions above.

b$.$ On June $1,$ Year $3,$ Burks spent $$26,440$ to successfully prosecute a patent infringement. As a

result, the estimate of useful life was extended to $12$ years from June $1,$ Year $3.$ Prepare all

journal entries required in Year $3$ and Year $4.$

c$.$ In Year $5,$ Burks determined that a competitor's product would make the New Age Piano

obsolete and the patent worthless by December $31,$ Year $6.$ Prepare all journal entries

required in Year $5$ and Year $6.$