Question

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 which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows.

Date:	Activity:	Cost:
2001-2002	Research conducted to develop precipitator	P384,000
Jan 2003	Design and construction of a prototype	87,600
Mar 2003	Testing of models	42,000
Jan 2004	Fees paid engineers and lawyers to prepare patent       application; patent granted June 30, 2000	59,500
Nov 2005	Engineering activity necessary to advance the design       of the precipitator to the manufacturing stage	81,500
Dec 2006	Legal fees paid to successfully defend precipitator       patent	42,000
May 2007	Research aimed at modifying the design of the       patented precipitator	49,000
Jul 20011	Legal fees paid in unsuccessful patent infringement       suit against a competitor	34,000

Based on execution of a royalty contract in March 2007, the patent is deemed to be economically viable. Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2009, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company’s year ends December 31.

1. The carrying value of patent No. 758-6002-1A on December 31, 2004? ________
2. The carrying value of patent No. 758-6002-1A on December 31, 2008? ________
3. The carrying value of patent No. 758-6002-1A on December 31, 2011? ________

Answer 1