During 2021, Winston Corporation spent $170,000 in research and development costs. As a result, a new product

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During 2021, Winston Corporation spent $170,000 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2021, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $18,000 related to the patent were incurred as of October 1, 2021.


Instructions

a. Prepare all journal entries required in 2021 and 2022 as a result of the transactions above.

b. On June 1, 2023, Winston spent $9,480 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2023. Prepare all journal entries required in 2023 and 2024.

c. In 2025, Winston determined that a competitor’s product would make the New Age Piano obsolete and the patent worthless by December 31, 2026. Prepare all journal entries required in 2025 and 2026.

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Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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