Question

On January 1, 2016, the Turner Company purchased a patent from the Hanson Company for $172,000. The patent had an estimated useful life of 12 years at that time. On January 1, 2018, the Turner Company incurred legal costs of $42,000 to successfully defended their patent against infringement by another company. On January 1, 2019, the Turner Company purchased a competing patent from the Miller Company for $36,000. They have no plans to use the competing patent in their business.

1) How will the patent amortization expense be for 2019? Show and label all of your

      computations.

2) Prepare the journal entry that will be recorded on December 31, 2019, to recognize

      that patent amortization expense.

Answer 1

Answer to question

1)	Patent amortization expense be for 2019 with label all of computations
	Initial Cost	$ 1,72,000.00
	estimated useful life of 12 years	12
	patent amortization expense per year	$     14,333.33
	legal costs	$     42,000.00
	Remaining useful life is 10 years	10
	patent amortization expense per year	$       4,200.00
	purchased a competing patent	$     36,000.00
	Remaining useful life is 9 years	9
	patent amortization expense per year	$       4,000.00
	patent amortization expense for December 2019	$     22,533.33
	Note no other information given for Legal cost and purchase of competing patent so use ful consider 12 years
2)	journal entry that will be recorded on December 31, 2019, to recognize that patent amortization expense
Date	Particulars	Debit	Credit
December 2019	Patent amortization account	$     22,533.33
	To Patent account		$ 22,533.33