Reporting a Patent Purchase

question 21

Essay

Reporting a patent purchase
Comox Corporation has a December 31 fiscal year end. Comox purchased a patent from Courtney Inc. for $ 400,000 on January 1, 2017. The patent expires on January 1, 2025. Comox has been amortizing it over its legal life. During 2020, Comox determined that the patent's economic benefits would not last longer than six years from the date of acquisition.
Instructions
Determine the amount that will be reported on
a) Comox's December 31, 2019 and 2020, statements of financial position.
b) Comox's 2020 income statement. Be specific about the account name and the account.

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Definitions:

Nash Equilibrium

In strategic games, it refers to a scenario where all participants choose strategies that are optimal, given the strategies of all other participants.

AMD

Advanced Micro Devices, a multinational semiconductor company known for its CPUs and GPUs.

Intel

A multinational corporation and technology company known for developing and manufacturing microprocessors and other semiconductor components.

Time-Discounted Profits

The present value of future profits, accounting for the fact that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.