Question

Amortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $376,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $19,000. If required, round your answer to the nearest dollar. a. Determine the patent amortization expense for the Year 4 ended December 31. $fill in the blank 78628a016fd203e_1 b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank.

Answer 1

Following are the responses to the given question:

Step-by-step explanation:

For point a:

patent cost
`=376000`

Start dividing by the useful life =8

Amortization per year
`=47000`

Amortization for 3 years=
`47000* 3=141000`

3 Year end-of-year book value=
`376000-141000=235000`

The cost of a lawsuit has been added
`=19000`

Year 4's book value
`=254000`

Multiply by the useful life
`=5`

Year 4 patent amortization cost
`=50800`

For point b:

Amortization expense 50800

Patent 50800