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USE THE INFORMATION PRESENTED BELOW TO ANSWER THE NEXT (3) QUESTIONS: The intangible asset section of Eastman Company at December 31, 2012, is presented below:
USE THE INFORMATION PRESENTED BELOW TO ANSWER THE NEXT (3) QUESTIONS: The intangible asset section of Eastman Company at December 31, 2012, is presented below: Patent A ($90,000 cost less $9,000 amortization) Copyright($48,000 cost less $19,200 amortization) 81,000 $28,800 109,800 Total Intangibles Patent A was acquired in January of 2012 and has a useful life of 10 years. When the copyright was purchased, it had a remaining legal life of 60 years, but Eastman projected it would generate revenues for only 10 years The following transactions may have affected intangible assets during 2013: June 30: Paid $29,750 legal costs to successfully defend Patent A against infringement. Eastman estimates the patent's useful life remained unchanged from the date they placed it into Jan-Aug: Developed a new product incurring $250,000 in research and development costs. Patent B was granted on September 1. Legal fees of $61,200 were incurred in filing for this patent. The company will amortize the cost of the patent over its legal life of 20 years Dec 31: At year end (after recording amortization for the current year), Eastman felt it was necessary to evaluate the copyright for impairment. Under current market conditions at Dec 31, 2013, the fair value of the copyright was determined to be $18,000. Eastman intends to continue to use the patent for at least three more years and estimates future net cash flows to be $7,000 per year. Determine total Amortization Expense to be reported on the Income Statement for the period ending December 31, 2013 for all intangibles: QUESTION 12 Determine the impairment Loss, if any, on the copyright. QUESTION 13 Determine the book value of Total Intangible Assets (net) that would appear on the December 31, 2013 balance sheet
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