I need attached spreadsheets done by Friday evening.
6000000600000 Jennie April 23
Test Your Knowledge
Students please fill-in areas that are shaded
ACCOUNTS AND EXPLANATIONS
Acquisition of patent amortization and change in useful life
LO 5 [10-15 minutes]
Miracle Printers (MP) manufactures printers. Assume that MP recently paid
for a patent on a new laser printer. Although it gives legal protection for
patent is expected to provide a competitive advantage for only
Assuming the straight-line method of amortization make journal entries to
record (a) the purchase of the patent and (b) amortization for year 1.
After using the patent for four years MP learns at an industry trade show that
another company is designing a more efficient printer. On the basis of this new
information MP decides starting with year 5 to amortize the remaining cost of
the patent over two remaining years giving the patent a total useful life of six
years. Record amortization for year 5.
Purchase of patent
Amortization for one year:
Amortization for year 5:
Calculate book value
Book value at beg of Yr 5
New estimated useful life remaining
New annual amortization