Exercise 12-10 (Part Level Submission) Larkspur Industries has the following patents on its December 31,...
90.2K
Verified Solution
Link Copied!
Question
Accounting
Exercise 12-10 (Part Level Submission) Larkspur Industries has the following patents on its December 31, 2016, balance sheet. Patent Item Initial Cost Useful Life at Date Acquired Patent A Patent B Patent C $43,248 $16,440 $20,160 Date Acquired 3/1/13 7/1/14 9/1/15 17 years 10 years 4 years The following events occurred during the year ended December 31, 2017. 1. Research and development costs of $242,000 were incurred during the year. 2. Patent D was purchased on July 1 for $43,548. 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 Larkspur estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2018 $1,950 1,950 2019 2020 1,950 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) (a) Compute the total carrying amount of Larkspur' patents on its December 31, 2016, balance sheet. (Round answer to 0 decimal places, e.g. 8,564.) Total carrying amount
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
