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VikaD [51]
3 years ago
7

In January 2021 Vega Corporation purchased a patent at a cost of $200,000. Legal and filing fees of $66,000 were paid to acquire

the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In January 2024, Vega spent $32,000 in legal fees for an unsuccessful defense of the patent and the patent is no longer usable. The amount charged to income (expense and loss) in 2024 related to the patent should be:
Business
1 answer:
timama [110]3 years ago
8 0

Answer:

$218,200

Explanation:

The computation of amount charged to income (expense and loss) is shown below:-

Total cost of the patent = $200,000 + $66,000

= $266,000

Amortization expense for 3 years = $266,000 ÷ 10 × 3

= $79,800

Net Patent cost = Total cost of the patent - Amortization expense

= $266,000 - $79,800

= $186,200

The amount charged to income (expense and loss) in 2024 related to the patent = Net Patent cost + Legal fees

= $186,200 + $32,000

= $218,200

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