Mattson Company Receives Royalties on a Patent It Developed Several $\quad$

question 39

Essay

Mattson Company receives royalties on a patent it developed several years ago. Royalties are 5% of net sales, receivable on September 30 for sales from January through June and receivable on March 31 for sales from July through December. The patent rights were distributed on July 1, 2008, and Mattson accrued royalty revenue of $60,000 on December 31, 2008, as follows:
Mattson received royalties of $65,000 on March 31, 2009, and $80,000 on September 30, 2009. The patent user indicated to Mattson that sales subject to royalties for the second half of 2009 should be $800,000.
Required:
(1.) Prepare any journal entries Mattson should record during 2009 related to the royalty revenue.
(2.) What changes should be made to retained earnings relative to these royalties?
Receivable - royalty revenue $\quad$ 60,000
Royalty revenue $\quad$$\quad$ 60,000

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Definitions:

Unique Needs

Specific requirements or preferences that differ among individuals or entities, often necessitating customized solutions.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Economies of Scope

Cost advantages that enterprises obtain due to a broad range of products rather than specializing in a single product or service, enabling more efficient use of shared resources.

Routing Flexibility

The ability to adjust and optimize the paths that products take from origin to destination in response to changing conditions or requirements.