Question 4 In early January 2023, Roger Corporation applied for a patent, incurring legal costs of $30,000. In January 2024, Roger incurred $9,000 of legal fees in a successful defense of its patent. Instructions a. Compute 2023 amortization, 12/31/23 carrying value, 2024 amortization, and 12/31/24 carrying value if the company amortizes the patent over 10 years. b. At the beginning of 2025, based on new market research, Roger determines that the fair value of the patent is $27,500. Estimated future cash flows from the patent are $30,000 on January 3, 2025. Prepare the journal entry, if any, to record the impairment loss. c. Compute the 2025 amortization and the 12/31/25 carrying value.

Question 4 In early January 2023, Roger Corporation applied for a patent, incurring legal costs of $30,000. In January 2024, Roger incurred $9,000 of legal fees in a successful defense of its patent. Instructions a. Compute 2023 amortization, 12/31/23 carrying value, 2024 amortization, and 12/31/24 carrying value if the company amortizes the patent over 10 years. b. At the beginning of 2025, based on new market research, Roger determines that the fair value of the patent is $27,500. Estimated future cash flows from the patent are $30,000 on January 3, 2025. Prepare the journal entry, if any, to record the impairment loss. c. Compute the 2025 amortization and the 12/31/25 carrying value.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 64E

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