Question

the purchase or the potent by Beckham Inc. da PLO2 In January 2020, Ford Co, purchased a patent from a research institution for $250,000. The patent was estimated to have a useful life of 15 years. In December 2021, Ford Co. defended the patent in legal proceedings and suc cessfully retained rights of ownership of the patent. The estimated life of the patent did not change from its origi- nal estimate Legal expenses were $20,000. Determine the carrying value of the patent on December 31, 2021. Brief Evaris ef Exercise 13-24 Computing b ut Carrying amount of Hot See Demo

Answer 1

Compute patent amortization expense upto December 31, 2021 as follows: $250,000 x2 Patent =- 15 years =33,333 $20,000 Legal cost = 157 months =$127 Total = $33,333 + $127 = $33,460 Calculate carrying value as follows: Patent=Original cost +Legal cost -Amortization =$250,000+$20,000 -$33,460 =$236,540