Recharge Ltd. purchased a patent on January 1, 2020, for $ 1,120,000. At the time of...

Recharge Ltd. purchased a patent on January 1, 2020, for $ 1,120,000. At the time of the purchase, the patent had a remaining legal life of 20 years. In January 2023, Recharge spent $ 92,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. Recharge’s year end was December 31.

Required

1. Prepare the entries on the books of Recharge to record

a. The purchase of the patent,

b. The amortization for the first year (2020),

c. The defence of the patent, and

d. Amortization for 2023.

Expert Solution

ekkarill92 answered 2 years ago

CSI Products Ltd., a public company, purchased a patent on January 1, 2020, for $ 1,120,000....

CSI Products Ltd., a public company, purchased a patent on January 1, 2020, for $ 1,120,000. At the time of the purchase, the patent had a remaining legal life of 20 years. In January 2023, CSI spent $ 92,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. CSI’s year end was December 31. Instructions Prepare the entries...

Cullumber Company purchased a patent on January 1, 2020 for $712000. The patent had a remaining...

Cullumber Company purchased a patent on January 1, 2020 for $712000. The patent had a remaining useful life of 10 years at that date. In January of 2021, Cullumber successfully defends the patent at a cost of $302400, extending the patent’s life to 12/31/32. What amount of amortization expense would Cullumber record in 2021? $101440 $71200 $78600 $83600

whargo company purchased a valuable technology patent on January 1, 2020 for $425,000. The patent has...

whargo company purchased a valuable technology patent on January 1, 2020 for $425,000. The patent has a useful life of 21 years and legal life of 17 years. Journalize: (a) the purchese of the parent for cash on January 1, 2020 (b) Amortization of the patent on december 31, 2020

On January 1, 2020 (the first day of its fiscal year) Vaughn Ltd. acquired a patent...

On January 1, 2020 (the first day of its fiscal year) Vaughn Ltd. acquired a patent which gave the company the right to use a production process. The process met the six criteria for capitalization as an intangible asset. Below is a listing of the events relating to the patent over the five fiscal years from 2020 through 2024: 2020: ● on January 1, acquired the patent for the production process from its inventory for a cash payment of $12,800,000,...

On January 1, 2020 (the first day of its fiscal year) Wildhorse Ltd. acquired a patent...

On January 1, 2020 (the first day of its fiscal year) Wildhorse Ltd. acquired a patent which gave the company the right to use a production process. The process met the six criteria for capitalization as an intangible asset. Below is a listing of the events relating to the patent over the five fiscal years from 2020 through 2024: 2020: ● on January 1, acquired the patent for the production process from its inventory for a cash payment of $17,400,000,...

In January 2014 TRX Limited purchased a patent for X1 $100000. At the time of purchase,...

In January 2014 TRX Limited purchased a patent for X1 $100000. At the time of purchase, the patent was valid for 20 years. Due to the nature of the product, however, the patent was estimated to have a useful life of only 10 years. In December 2015 after an in-depth market survey, it was discovered that a new much-improved product had just been launched in the market due to which sales of X1 had dropped drastically the patent was now...

Question 16 Day Company purchased a patent on January 1, 2012 for $600,000. The patent had...

Question 16 Day Company purchased a patent on January 1, 2012 for $600,000. The patent had a remaining useful life of 10 years at that date. In January of 2013, Day successfully defends the patent at a cost of $270,000, extending the patent's life to 12/31/24. What amount of amortization expense would Kerr record in 2013? Question 16 options: A. $60,000 B. $67,500 C. $72,500 D. $90,000 Question 17 Riley Co. incurred the following costs during 2013: Significant modification to...

On January 1, 20x2, Astro Ltd. purchased a piece of equipment costing $84816. At the time,...

On January 1, 20x2, Astro Ltd. purchased a piece of equipment costing $84816. At the time, the equipment’s useful life was expected to be 8 years with an estimated residual value of $15821. In 20x6, these estimates were revised: the total estimated useful life of the equipment is expected to be 12 years and the residual value is expected to be $11736. What will the depreciation expense be for 20x6? Assume the company uses straight-line depreciation.

On January 1, 2020, Sharp Company purchased $50,000 of Sox Company 6% bonds, at a time...

On January 1, 2020, Sharp Company purchased $50,000 of Sox Company 6% bonds, at a time when the market rate was 5%. The bonds mature on December 31, 2024, and pay interest annually on December 31. Sharp plans to and has the ability to hold the bonds until maturity. Assume that Sharp uses the effective interest method to amortize any premium or discount on investments in bonds. At December 31, 2020, the bonds are quoted at 98. a. Prepare the...

Astrom Ltd. purchased a piece of equipment on May 12, 2020, for $51,200. At the time,...

Astrom Ltd. purchased a piece of equipment on May 12, 2020, for $51,200. At the time, management determined that the equipment would have a 4-year useful life and a residual value of $4,400. Astrom uses the straight-line depreciation method for its equipment, and the company has a December 31 year end. Also assume that Astrom sold the equipment on September 25, 2022, for $20,725. Prepare all necessary journal entries for 2020, 2021, and 2022 related to each of the following...

Question