Choo Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Choo does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally, it sells a patent. The history of Choo’s patent number 758-6002-1A is as follows.

Based on execution of a royalty contract in March 2012, the patent is deemed to be economically viable.
Choo assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2014, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30.
The company’s year ends December 31.
Instructions Compute the carrying value of patent No. 758-6002-1A on each of the following dates:

(a) December 31, 2009.

(b) December 31, 2013.

(c) December 31, 2016.

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Date 2006-2007 Jan. 2008 March 2008 Jan. 2009 Activity Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2009 Cost HK$384,000 87,600 42,000 59,500 Nov. 2010 Engineering activity necessary to advance the design Dec. 2011 April 2012 of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator 81,500 42,000 49,000 July 2016 Legal fees paid in unsuccessful patent infringement suit against a competitor 34,000