On September 30, 2009, Leeds LTD. acquired at patent In conjunction with the purchase of another company. The patent, valued at $6 million, was estimated to nave a 10-year life and no residual value. Leeds uses ate straight-fine method of amortization for intangible assets. Ante beginning of January 2011, Leeds successfully defended its patent against infringement. Litigation costs totaled $500,000.

Required:

1. Calculate amortization of the patent for 2009 and 2010.

2. Prepare the journal entry to record the 2011 litigation costs.

3. Calculate amortization for 2011.

4. Repeat requirements 2 and 3 assuming that Leeds prepares as financial statements according to IFRS.

Answer rating: 100% (QA)

Requirement 1 Calculate Amortization of the patent for 2009 and 2010 Amortization Cost Residual valu... View the full answer