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Goryan [66]
2 years ago
7

On January 2, year 1, Lava, Inc. purchased a patent for a new consumer product for $90,000. At the time of purchase, the patent

was valid for fifteen years; however, the patent's useful life was estimated to be only ten years due to the competitive nature of the product. On December 31, year 4, the product was permanently withdrawn from sale under governmental order because of a potential health hazard in the product. What amount should Lava charge against income during year 4, assuming amortization is recorded at the end of each year
Business
1 answer:
Archy [21]2 years ago
4 0

Answer:

The amount Lava should charge against income during year 4 is $63,000.

Explanation:

Since amortization is assumed to be recorded at the end of each year, this can be calculated as follows:

Annual amortization expense = Cost of the patent  / Patent's estimated useful life = $90,000 / 10 = $9,000

Amortization expense recorded prior to year 4 = Annual amortization expense * 3 years =  $9,000 * 3 = $27,000

Unamortized cost of patent charge against income during year 4 = Cost of the patent - Amortization expense recorded prior to year 4 = $90,000 - $27,000 = $63,000

Therefore, the amount Lava should charge against income during year 4 is $63,000.

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From the following information extracted from the Balance Sheet of XYZ Company, you are required to calculate:
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Consider an economy with only two goods: bread and wine. In 1982, the typical family bought 4 loaves of bread at 50¢ per loaf an
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115

Explanation:

Data provided in the  question:

Number of breads bought = 4

Number of wine bottles bought = 2

Cost of bread in year 1982 = 50 cents = $0.5

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Cost of bread in year X = 75 cents = $0.75

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Now,

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3 years ago
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