Answer the questions asked about each of the factual situations. (If answer is zero, please enter
0. Do not leave any fields blank.)
Solution
Palmiero purchased a patent from Vania Co. for $1,591,400 on January 1, 2008. The patent is
being amortized over its remaining legal life of 10 years, expiring on January 1, 2018. During
2010, Palmiero determined that the economic benefits of the patent would not last longer than 6
years from the date of acquisition. What amount should be reported in the balance sheet for the
patent, net of accumulated amortization, at December 31, 2010?
Amortization for 2008/2009 (1591400/10 x 2) = 318,280
Amortization for 2010 (1591400-318280) / (6-2) = 318,280
Accumulated Amortization = 318,280 + 318,280 = 635,560
Patent = 954,480 (1,591,400
0. Do not leave any fields blank.)
Solution
Palmiero purchased a patent from Vania Co. for $1,591,400 on January 1, 2008. The patent is
being amortized over its remaining legal life of 10 years, expiring on January 1, 2018. During
2010, Palmiero determined that the economic benefits of the patent would not last longer than 6
years from the date of acquisition. What amount should be reported in the balance sheet for the
patent, net of accumulated amortization, at December 31, 2010?
Amortization for 2008/2009 (1591400/10 x 2) = 318,280
Amortization for 2010 (1591400-318280) / (6-2) = 318,280
Accumulated Amortization = 318,280 + 318,280 = 635,560
Patent = 954,480 (1,591,400
