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Suppose Durtan paid $2.4 million for a patent related to an integrated system, including hands-free cell phone, GPS, and iPod connectivity. The company expects to install this system in its automobiles for eight years. Durtan will sell this as an "extra" for $1,000. In the first year, 10,400 units were sold. All costs per unit totalled $850. Required 1. As the CFO, how would you record transactions relating to the patent in the first year? 2. Prepare the income statement for the integrated system's operations for the first year. Evaluate the profitability of the integrated system's operations. Use an income tax rate of 32%. 3. Explain what items were recorded as assets and why. Evaluate the profitability of the integrated system's operations. The integrated system operations were Net income of Requirement 3. Explain what items were recorded as assets and why. The value of should be recorde a $10,400,000 is 32% $856,800 is 8.24% $1,260,000 is 12.12% Requirement 3. Explain what items were recorded as assets and why. The V value of V should be recorded as Vasset as Durtan has the exclusive right to use it in production Since its expected useful life is it should GPS hands-free cell phone patent $2,400,000 $1,260,000 $10,400,000 a tangible an intangible for 8 years for 20 years forever 8 years 20 years indefinite be amortized on a straight-line basis over 8 years be amortized over 20 years not be amortized

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