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 on the books of CSI to record

a) To record the purchase of the patent

b) To record the legal defence of the patent

c) To record 2023 amortization

Part B. The owners of Amazon Corp. are planning to sell the business. The cumulative earnings for the past five years are $ 600,000 including non-recurring losses of $ 100,000. The annual earnings based on an average rate of return for this industry would be $ 80,000. If excess earnings are to be capitalized at 12%, what is the implied goodwill?

Expert Solution

For any clarificartion please comment. Kindly Up Vote.

ekkarill92 answered 2 years ago

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