Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2020 (the first day of its fiscal year) Bridgeport Ltd. acquired a patent which gave the company the right to use a

image text in transcribedimage text in transcribed

On January 1, 2020 (the first day of its fiscal year) Bridgeport Ltd. acquired a patent which gave the company the right to use a production process. The process met the six criteria for capitalization as an intangible asset. Below is a listing of the events relating to the patent over the five fiscal years from 2020 through 2024: 2020: on January 1, acquired the patent for the production process from its inventory for a cash payment of $20,200,000, and determined that the process had an indefinite useful life. on December 31, tested the patent for impairment and determined that its fair value was $20,800,000. . 2021: on December 31, tested the patent for impairment and determined that its fair value was $18,200,000. 2022: . on December 31, tested the patent for impairment and determined that its fair value was $19,300,000. 2023: on January 1, determined that the useful life of the patent was no longer indefinite, its carrying amount was recoverable, its estimated remaining useful life was 7 years, its estimated residual value was $0 and the pattern of economic benefits to be obtained from the patent during those 7 years was evenly spread over those 7 years. on December 31, tested the process for impairment and recoverability and determined that its fair value was $600,000 and its carrying amount was recoverable. 2024: on December 31, tested the patent for impairment and recoverability and determined that its fair value was $0 and its carrying amount was not recoverable. Prepare all journal entries related to the patent for the production process Bridgeport will record from January 1, 2020 to December 31, 2024, using the cost recovery impairment model. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Dec. 31, 2024 Amortization Expense 15600000 Accumulated Amortization - Patents 15600000 (To record amortization expense) Dec. 31, 2024 Loss on Impairment 2600000 Accumulated Amortization - Patents 2600000

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

Financial Accounting Reporting, Analysis And Decision Making

Authors: Shirley Carlon

6th Edition

0730363279, 9780730363279

More Books

Students also viewed these Accounting questions