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Marin Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial...

Marin Industries has the following patents on its December 31, 2019, balance sheet.

Patent Item

Initial Cost

Date Acquired

Useful Life at Date Acquired
Patent A $45,696 3/1/16 17 years
Patent B $17,880 7/1/17 10 years
Patent C $25,920 9/1/18 4 years


The following events occurred during the year ended December 31, 2020.

1. Research and development costs of $254,000 were incurred during the year.
2. Patent D was purchased on July 1 for $29,184. 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, 2020. The controller for Marin estimates the expected future cash flows from Patent B will be as follows.

Year

Expected Future Cash Flows
2021 $2,100
2022 2,100
2023 2,100


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 Marin' patents on its December 31, 2020, balance sheet.

Total carrying amount

$ enter the Total carrying amount in dollars

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Expert Solution

please comment down for any further assistance.

ekkarill92 answered 2 years ago
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