Answered

On January 1, 2021, Weaver Corporation purchased a patent for $252,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2023, the company incurred legal fees of $72,000 in successfully defending a patent infringement suit. The successful defense did not change the company’s estimate of useful life. Weaver Corporation’s year-end is December 31.

Answer :

Parrain

Based on the price the patent was purchased for and its remaining legal life, the following are correct:

  • Purchase of patent will result in debit to Patent account and credit to cash account.
  • Amortization on the patent will be $42,000.

Recording the Patent purchase

The patent is an asset so the record of the purchase will be:

Date                   Account title                                 Debit               Credit

Jan 1, 2021         Patent                                        $252,000

                           Cash                                                                   $252,000

Recording the Amortization

The patent is good for 6 more years so the amortization will be done in a straight line manner for these years:

= 252,000 / 6 years

= $42,000

Date                    Account title                            Debit                 Credit

Dec 31, 2021      Amortization expense             $252,000

                           Accumulated amortization                              $252,000

Find out more on amortization at https://brainly.com/question/10561878.

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