Question

Ericton Enterprises Inc. developed a new machine for manufacturing baseballs. Because the machine is considered very valuable, the company had it patent following expenditures were incurred in developing and patenting 4. ed. The the machine. (a) Purchases of special equipment to be used development of the new machine ole 1opmess $182,000 (b) Research salaries and fringe benefits for (c) Cost of testing prototype (d) Legal costs for filing for patent (e) Fees paid to government patent office () Drawings required by patent office to be engineers and scientists 17,100 23, 600 12,700 2,500 4,700 filed with patent application Ericton elected to amortize the patent over its legal life. At the beginning of the second year, Ericton Enterprises paid $24,000 to successfully defend the patent in an infringement suit. At the beginning of the fourth year Ericton determined that the remaining estimated useful life of the patent was five years. Record the above transactions in general journal form for Ericton Enterprises Inc. for the first five years of the life of the patent. Include any amortization or depreciation for each period. ANS: Year Year

Answer 1

Note:

Legal life of patent is 20 year.