In January 2018, Vega Corporation purchased a patent at a cost of $212,000. Legal and filing...

In January 2018, Vega Corporation purchased a patent at a cost of $212,000. Legal and filing fees of $69,000 were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In January, 2021, Vega spent $23,000 in legal fees for an unsuccessful defense of the patent and the patent is no longer usable. The amount charged to income (expense and loss) in 2021 related to the patent should be:

Expert Solution


	Purchase cost of patent =	$ 2,12,000
	Add: Legal and filing fees =	$ 69,000
	Total	$ 2,81,000
	Divide By	"/" By
	Estimated Life	10 Years
	Amortization per year =	$ 28,100

	Amortized in 2018 to 2020 = $ 28,100 X 3 Years =	$ 84,300


	Book Value = $ 281,000 - $ 84,300 =	$ 1,96,700

	Add: Legal Fees in the year 2021 =	$ 23,000

	Total Value =	$ 2,19,700


	Amount of loss in the year 2021 = $219,700


	Answer = $ 219,700

ekkarill92 answered 1 year ago

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