Question

Tiburon Corporation purchased a patent for $1,850,000 on November 30, 2018. It has a remaining legal life of 18 years. Tiburon estimates that the remaining useful life of the patent is useful life of 15 years. What balance will be reported on the December 31, 2020 balance sheet for the patent (if necessary, round your answer to the nearest dollar)

Answer 1

$1,593,056

Step-by-step explanation:

Calculation to determine What balance will be reported on the December 31, 2020 balance sheet for the patent

First step is to calculate the amortization amount

Amortization=$1,850,000 (cost)/ 180 months (useful life) * 25 months (November 30, 2018 - December 31, 2020)

Amortization = $256,944

Now let determine the Balance reported

Parent=$1,850,000 - $256,944

Patent= $1,593,056

Therefore the balance that will be reported on the December 31, 2020 balance sheet for the patent is $1,593,056