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Sheffield Company acquired a patent on an oil extraction technique on January 1, 2020 for...

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Accounting

Sheffield Company acquired a patent on an oil extraction technique on January 1, 2020 for $7600000. It was expected to have a 10 year life and no residual value. Sheffield uses straight-line amortization for patents. On December 31, 2021, the future cash flows expected from the patent were $930000 per year for the next eight years. The present value of these cash flows, discounted at Sheffields market interest rate, is $4250000. At what amount should the patent be carried on the December 31, 2021 balance sheet?

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