Valix Finacc vol 1 Problem 20-7

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 20 Problem 20-7

1.  Patent                                                                                                900,000

            Cash                                                                                                                   900,000

2.  Amortization of patent                                                                       90,000

            Patent (900,000 / 10)                                                                                             90,000

3.  Patent written off                                                                              540,000

            Patent                                                                                                                540,000

    Cost                                                                                                                900,000

    Amortization for 2005, 2006, 2007 and 2008 (90,000 x 4)                                          (360,000)

    Carrying amount – 12/31/2008                                                                                   540,000