contestada

Barry Company sells a patent for $25,000. The patent had an acquisition cost of $120,000 and accumulated amortization of $100,000 at the time of the sale. What was the amount of gain or loss recognized on the disposal of the patent

Respuesta :

jepessoa

Answer:

Barry Company must recognize a $5,000 gain resulting fro the disposal of the patent.

Explanation:

the patent's book value = acquisition cost - accumulated amortization = $120,000 - $100,000 = $20,000

gain from disposal of patent = selling price - book value = $25,000 - $20,000 = $5,000

Since patents are intangible assets, they are amortized, not depreciated. But accumulated amortization works in the same way as accumulated depreciation, they both reduce the asset's carrying value.

Otras preguntas