Compute the carrying value

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Reference no: EM132054291

Question - Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows.

Date

Activity

Cost

2005-2006

Research conducted to develop precipitator

$382,750

Jan. 2007

Design and construction of a prototype

85,160

March 2007

Testing of models

69,160

Jan. 2008

Fees paid engineers and lawyers to prepare patent



application; patent granted June 30, 2008

87,380

Nov. 2009

Engineering activity necessary to advance the design



of the precipitator to the manufacturing stage

80,790

Dec. 2010

Legal fees paid to successfully defend precipitator patent

69,160

April 2011

Research aimed at modifying the design of the



patented precipitator

70,640

July 2015

Legal fees paid in unsuccessful patent infringement suit



against a competitor

60,730

Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2013, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31.

Compute the carrying value of patent No. 758-6002-1A on each of the following dates:

(a) December 31, 2008

(b) December 31, 2012

(c) December 31, 2015

Reference no: EM132054291

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