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This question has two parts. Thank you. Exercise 12-10 Skysong Industries has the following patents on its December 31, 2016, balance sheet. Patent Item Patent
This question has two parts. Thank you.
Exercise 12-10 Skysong Industries has the following patents on its December 31, 2016, balance sheet. Patent Item Patent A Patent B Patent C Initial Cost $44,268 $17,040 $22,560 Date Acquired 3/1/13 7/1/14 9/1/15 Useful Life at Date Acquired 17 years 10 years 4 years The following events occurred during the year ended December 31, 2017. 1. Research and development costs of $247,000 were incurred during the year. 2. Patent D was purchased on July 1 for $37,848. This patent has a useful life of 91/2 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, 2017. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. Year 2018 2019 2020 Expected Future Cash Flows $2,200 2,200 2,200 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year) Compute the total carrying amount of Skysong patents on its December 31, 2016, balance sheet. (Round answer to O decimal places, e.g. 8,564.) Total carrying amount$Step by Step Solution
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