Acc422 Intermediate Accounting: P12-2 Fields Laboratories holds a valuable patent

Acc422 Intermediate Accounting
P12-2 Accounting for Patents
Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows.
Date Activity Cost
2005-2006 Research conducted to develop precipitator 384,000
Jan. 2007 Design and construction of a prototype 87,600
Mar-07 Testing of models 42,000
Jan. 2008 Fees paid engineers and lawyer to prepare patent
application; patent granted June 30, 2004 59,500
Nov. 2009 Engineering activity necessary to advance the 81,500
design of the precipitator to the manufacturing stage
Dec. 2010 Legal fees paid to successfully defend precipitator patent 42,000
Apr-11 Research aimed at modifying the design of the patented precipitator 43,000
Jul-15 Legal fees paid in unsuccessful patent infringement suit against a competitor 34,000
Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2013, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31.

Compute the carrying value of patent No. 758-6002-1A on each of the following dates:
(a) December 31, 2008.
(b) December 31, 2012.
(c) December 31, 2015.
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