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Exercise 12-10 Marin Industries has the following patents on its December 31, 2019, balance sheet. Patent...

Exercise 12-10

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

 $41,208 3/1/16 17 years

Patent B

 $15,240 7/1/17 10 years

Patent C

 $15,360 9/1/18 4 years

The following events occurred during the year ended December 31, 2020.
1. Research and development costs of $232,000 were incurred during the year.
2. Patent D was purchased on July 1 for $30,438. 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

 $1,900

2022

 1,900

2023

 1,900

The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)

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Compute the total carrying amount of Marin’ patents on its December 31, 2019, balance sheet.
Total carrying amount $enter the Total carrying amount in dollars
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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ekkarill92 answered 1 year ago
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