Answer:
The amount patent(s) should be reported on the December 31, 2020, balance sheet, assuming monthly amortization of patents, is $32,300.
Explanation:
This can be calculated as follows:
Patent book value = $249,600
Remaining useful years January 1, 2020 = 8
Remaining useful months of the patents from January 1, 2020 = Remaining useful years January 1, 2020 * 12 8 * 12 = 96
Monthly Patent book value = Patent book value / Remaining useful months = $249,600 = $2,600
Patent book value amortized from January 1, 2020 to December 1, 2020 = Monthly Patent book value * 12 = $2,600 * 12 = $31,200
Legal fee incurred = $93,500
Number of months from January 1, 2020 to December 1, 2020 = 11
Relevant months of legal fee incurred starting from December 1, 2020 = Remaining useful months of the patents from January 1, 2020 - Number of months from January 1, 2020 to December 1, 2020 = 96 - 11 = 85
Monthly legal fee = Legal fee incurred / Relevant months of legal fee incurred starting from December 1, 2020 = $93,500 / 85 = $1,100
Amount to report = Patent book value amortized from January 1, 2020 to December 1, 2020 + Monthly legal fee for December 1, 2020 only = $31,200 + $1,100 = $32,300
Therefore, the amount patent(s) should be reported on the December 31, 2020, balance sheet, assuming monthly amortization of patents, is $32,300.
