On January 1,2015,The Donut Stop purchased a patent for $80,000.The remaining legal life is 20 years,but the company estimates the patent will be useful for only five more years.In January 2016,the company incurred legal fees of $25,000 in successfully defending a patent infringement suit.The successful defense did not change the company's estimate of useful life.The Donut Stop's year end is December 31.Record the purchase and amortization in 2015 and the legal fees and amortization in 2016.What is the balance in the Patents account at the end of 2016?

Question

Quizplus · Accepted Answer

The Answer of On January 1,2015,The Donut Stop purchased a patent for $80,000.The remaining legal life is 20 years,but the company estimates the patent will be useful for only five more years.In January 2016,the company incurred legal fees of $25,000 in successfully defending a patent infringement suit.The successful defense did not change the company's estimate of useful life.The Donut Stop's year end is December 31.Record the purchase and amortization in 2015 and the legal fees and amortization in 2016.What is the balance in the Patents account at the end of 2016?

On January 1,2015,The Donut Stop Purchased a Patent for $80,000