Assignment
Kingbird Industries has the following patents on its December 31, 2016, balance sheet.
|
Patent Item
|
Initial Cost
|
Date Acquired
|
Useful Life at Date Acquired
|
|
Patent A
|
$45,288
|
3/1/13
|
17 years
|
|
Patent B
|
$17,640
|
7/1/14
|
10 years
|
|
Patent C
|
$24,960
|
9/1/15
|
4 years
|
The following events occurred during the year ended December 31, 2017.
1. Research and development costs of $252,000 were incurred during the year.
2. Patent D was purchased on July 1 for $48,450. This patent has a useful life of 91/2 years.
3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2017. The controller for Kingbird estimates the expected future cash flows from Patent B will be as follows.
|
Year
|
Expected Future Cash Flows
|
|
2018
|
$2,000
|
|
2019
|
2,000
|
|
2020
|
2,000
|
The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)
Compute the total carrying amount of Kingbird' patents on its December 31, 2016, balance sheet. (Round answer to 0 decimal places, e.g. 8,564.)
Compute the total carrying amount of Kingbird' patents on its December 31, 2017, balance sheet. (Round answer to 0 decimal places, e.g. 8,564.)