Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes that it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells one of its patents. The history of Fields patent number 758-6002-1A is as follows. Date Activity Cost 2011 − 2012 Research conducted to develop precipitator $369,000 Jan. 3, 2013 Design and construction of a prototype (capitalization criteria not yet met) 88,200 Mar. 15, 2013 Testing of models 40,400 Jan. 4, 2014 Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 64,800 Nov. 30, 2015 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 82,500 Dec. 31, 2016 Legal fees paid to successfully defend precipitator patent 38,500 Apr. 15, 2017 Research aimed at modifying the design of the patented precipitator 39,500 July 31, 2021 Legal fees paid in unsuccessful patent infringement suit against a competitor 33,500 Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company’s year ends December 31. Fields follows IFRS for reporting purposes. Calculate the carrying value of patent No. 758-6002-1A on December 31, 2014. Carrying value of patent $Enter your answer in accordance to the question statement Calculate the carrying value of patent No. 758-6002-1A on December 31, 2018. Carrying value of patent $Enter your answer in accordance to the question statement Calculate the carrying value of patent No. 758-6002-1A on December 31, 2021. Carrying value of patent $Enter your answer in accordance to the question statement Would your answer differ if ASPE were followed? Choose the answer from the menu in accordance to the question statement
Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes that it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells one of its patents. The history of Fields patent number 758-6002-1A is as follows. Date Activity Cost 2011 − 2012 Research conducted to develop precipitator $369,000 Jan. 3, 2013 Design and construction of a prototype (capitalization criteria not yet met) 88,200 Mar. 15, 2013 Testing of models 40,400 Jan. 4, 2014 Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 64,800 Nov. 30, 2015 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 82,500 Dec. 31, 2016 Legal fees paid to successfully defend precipitator patent 38,500 Apr. 15, 2017 Research aimed at modifying the design of the patented precipitator 39,500 July 31, 2021 Legal fees paid in unsuccessful patent infringement suit against a competitor 33,500 Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company’s year ends December 31. Fields follows IFRS for reporting purposes. Calculate the carrying value of patent No. 758-6002-1A on December 31, 2014. Carrying value of patent $Enter your answer in accordance to the question statement Calculate the carrying value of patent No. 758-6002-1A on December 31, 2018. Carrying value of patent $Enter your answer in accordance to the question statement Calculate the carrying value of patent No. 758-6002-1A on December 31, 2021. Carrying value of patent $Enter your answer in accordance to the question statement Would your answer differ if ASPE were followed? Choose the answer from the menu in accordance to the question statement
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 3Q
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Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes that it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells one of its patents. The history of Fields patent number 758-6002-1A is as follows.
Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company’s year ends December 31. Fields follows IFRS for reporting purposes.
| Date | Activity | Cost | ||
| 2011 − 2012 | Research conducted to develop precipitator | $369,000 | ||
| Jan. 3, 2013 | Design and construction of a prototype (capitalization criteria not yet met) | 88,200 | ||
| Mar. 15, 2013 | Testing of models | 40,400 | ||
| Jan. 4, 2014 | Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 | 64,800 | ||
| Nov. 30, 2015 | Engineering activity necessary to advance the design of the precipitator to the manufacturing stage | 82,500 | ||
| Dec. 31, 2016 | Legal fees paid to successfully defend precipitator patent | 38,500 | ||
| Apr. 15, 2017 | Research aimed at modifying the design of the patented precipitator | 39,500 | ||
| July 31, 2021 | Legal fees paid in unsuccessful patent infringement suit against a competitor | 33,500 |
Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company’s year ends December 31. Fields follows IFRS for reporting purposes.
Calculate the carrying value of patent No. 758-6002-1A on December 31, 2014.
| Carrying value of patent | $Enter your answer in accordance to the question statement |
Calculate the carrying value of patent No. 758-6002-1A on December 31, 2018.
| Carrying value of patent | $Enter your answer in accordance to the question statement |
Calculate the carrying value of patent No. 758-6002-1A on December 31, 2021.
| Carrying value of patent | $Enter your answer in accordance to the question statement |
Would your answer differ if ASPE were followed?
| Choose the answer from the menu in accordance to the question statement |
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