Racer Company acquired patent rights on January 1,2014,for $1,080,000.The patent has a useful life equal to its legal life of 15 years.On January 2,2017,Racer successfully defended the patent in a lawsuit at a cost of $78,000.
Required
(1) Determine the patent amortization expense for the current year ended December $31,2017$.

(2) Analyze the impact of the adjusting entry to recognize the amortization.

Question

Racer Company acquired patent rights on January 1,2014,for $1,080,000.The patent has a useful life equal to its legal life of 15 years.On January 2,2017,Racer successfully defended the patent in a lawsuit at a cost of $78,000.
Required
 (1) Determine the patent amortization expense for the current year ended December $31,2017$.

(2) Analyze the impact of the adjusting entry to recognize the amortization.

Quizplus · Accepted Answer

The Answer of Racer Company acquired patent rights on January 1,2014,for $1,080,000.The patent has a useful life equal to its legal life of 15 years.On January 2,2017,Racer successfully defended the patent in a lawsuit at a cost of $78,000.
Required
 (1) Determine the patent amortization expense for the current year ended December $31,2017$.

(2) Analyze the impact of the adjusting entry to recognize the amortization.

Racer Company Acquired Patent Rights on January 1,2014,for $1,080,000 31,201731,201731,2017 (2) Analyze the Impact of the Adjusting Entry

Racer Company Acquired Patent Rights on January 1,2014,for $1,080,000 $31,2017$

(2) Analyze the Impact of the Adjusting Entry