Nieland Industries had one patent recorded on its books as of January 1, 2010. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2010, Nieland incurred research and development costs of $96,000 and brought a patent infringement suit against a competitor. On December 1, 2010, Nieland received the good news that its patent was valid and that its competitor could not use the process Nieland had patented. The company incurred $85,000 to defend this patent. At what amount should patent(s) be reported on the December 31, 2010, balance sheet, assuming monthly amortization of patents? $ ?
| Carrying Amount | Life in Months | Amortization Per Month | Months Amortization | ||||
| Patent (1/1/10) | $288,000 | 96 | $3,000 | 12 | |||
| Legal costs (12/1/10) | 85,000 | 85 | $1,000 | 1 | |||
| $373,000 |
| Carrying amount……………………………………………………………………. | $373,000 |
| Less: Amortization of patent (12 X $3,000)……………………………… | (36,000) |
| Legal costs amortization (1 X $1,000)………………………….. | (1,000) |
| Carrying amount 12/31/10………………………………………………………. | $336,000 |
