Intangible Asset Impairment Picot Collective Purchases a Patent on January 1, 2015 for 1

question 92

Essay

Intangible asset impairment
Picot Collective purchases a patent on January 1, 2015 for $ 118,800. At the time of purchase, Picot estimated that the patent had a useful life of 12 years. Picot used the straight-line method to amortize the patent, and annual impairment tests showed no impairment of the patent's value. On January 1, 2020, Picot sold the patent for $ 84,600.
Instructions
Prepare the journal entry to record the sale of the patent.

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Definitions:

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made when the other party has reasonably relied on that promise to their detriment.

Consideration

A fundamental component in contract law, referring to something of value that is exchanged between parties as part of an agreement.

Inventor

An individual who creates something new, whether it is an idea for a product, a device, or a process.

Exclusive Right

A legal entitlement allowing an individual or entity to engage in a particular activity or use a particular property to the exclusion of all others.