Accounting ABC acquired a patent on an oil extraction technique on January 1, 2018 for $12,000,000....

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Accounting ABC acquired a patent on an oil extraction technique on January 1, 2018 for $12,000,000. It was expected to have a 15-year life and no residual value. ABC uses straight-line amortization for patents. On December 31, 2019, the future cash flows expected from the patent were $1,000,000 per year for the next 13 years. The present value of these cash flows is discounted at ABC's market $ 6,500,000. At what amount should the patent be carried on the December 31, 2019 balance sheet? Answer: $10,400,000 Accounting ABC acquired a patent on an oil extraction technique on January 1, 2018 for $12,000,000. It was expected to have a 15-year life and no residual value. ABC uses straight-line amortization for patents. On December 31, 2019, the future cash flows expected from the patent were $1,000,000 per year for the next 13 years. The present value of these cash flows is discounted at ABC's market $ 6,500,000. At what amount should the patent be carried on the December 31, 2019 balance sheet? Answer: $10,400,000

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