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Marin Industries has the following patents on its December 31, 2016, balance sheet. Patent Item Initial Cost Date Acquired Useful...

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Accounting

Marin Industries has the following patents on its December 31,2016, balance sheet.

Patent Item

Initial Cost

Date Acquired

Useful Life at Date Acquired

Patent A$43,4523/1/1317 years
Patent B$16,5607/1/1410 years
Patent C$20,6409/1/154 years


The following events occurred during the year ended December 31,2017.

1.Research and development costs of $243,000 were incurred duringthe year.
2.Patent D was purchased on July 1 for $34,770. This patent has auseful life of 91/2 years.
3.As a result of reduced demands for certain products protectedby Patent B, a possible impairment of Patent B’s value may haveoccurred at December 31, 2017. The controller for Marin estimatesthe expected future cash flows from Patent B will be asfollows.

Year

Expected Future Cash Flows

2018$2,000
20192,000
20202,000


The proper discount rate to be used for these flows is 8%. (Assumethat the cash flows occur at the end of the year.)

1) Compute the total carrying amount of Marin’ patents on itsDecember 31, 2016, balance sheet.

2) Compute the total carrying amount of Marin' patents on itsDecember 31, 2017, balance sheet.

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