Valix Finacc vol 1 Problem 20-6

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 20 Problem 20-6

1.  Patent                                                                                             7,140,000

            Cash                                                                                                                7,140,000

2.  Amortization of patent                                                                     476,000

            Patent (7,140,000 / 15)                                                                            476,000

3.  Amortization of patent                                                                     816,000

            Patent (5,712,000 / 7)                                                                                          816,000

4.  Acquisition cost                                                                                                      7,140,000

     Amortization for 2005, 2006 and 2007 (476,000 x 3)                                    (1,428,000)

    Carrying amount – 1/1/2008                                                                                   5,712,000

    Amortization for 2008                                                                                             (   816,000)

    Carrying amount – 12/31/2008                                                                                4,896,000