Subsidiary 7500 cost of equipment acquired for

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subsidiary 75,00 0 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 90,00 0 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 80,00 0 Instructions (a) On the basis of the information above, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end. Trademarks 15,000 Excess of cost over fair value 75,000 Total intangible assets 90,000 (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes. 01/2/17 purcahased patent 350,000 04/1/17 purchase goodwill 360,000 07/1/17 purchased franchise with 10 year life 450,000 08/1/17 payment of copyright 156,000 09/1/17 research and development costs 215,000 total 1,531,000 E12-10. (Accounting for Patents) (LO 1 , 2 , 4 ) Tones Industries has the following patents on its December 31, 2016, balance sheet.
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Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $30,600 3/1/13 17 years Patent B $15,000 7/1/14 10 years Patent C $14,400 9/1/15 4 years The following events occurred during the year ended December 31, 2017. 1. Research and development costs of $245,700 were incurred during the year. 2. Patent D was purchased on July 1 for $36,480. This patent has a useful life of 9 ½ years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2017. The controller for Tones estimates the expected future cash flows from Patent B will be as follows. Yea r Expected Future Cash Flows 201 8 $2,000 201 9 2,000 202 0 2,000 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Instructions (a) Compute the total carrying amount of Tones' patents on its December 31, 2016, balance sheet. initial cost useful life at date acquired depreciatio n per year accumulated written of value carrying value depreciati on for 2017 carrying value 30600 17 1,800 5,100 25,500 1,800 23,700 15000 10 1,500 2,250 12,750 1,500 11,250 14400 4 3,600 1,200 13,200 3,600 9,600 (b) Compute the total carrying amount of Tones' patents on its December 31, 2017, balance sheet.
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