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27 July, 09:49

Sunland Company purchases a patent for $169,300 on January 2, 2017. Its estimated useful life is 5 years. (a) Compute amortization expense for the first year. Amortization Expense (b) Show how this patent is reported on the balance sheet at the end of the first year. : $

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  1. 27 July, 09:53
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    The presentation and journal entry is shown below:

    Explanation:

    1. Amortization expense $33,860

    To Patent $33,860

    (Being the amortization expense is recorded)

    It is calculated below:

    = $169,300 : 5 years

    = $33,860

    2. The presentation is shown below:

    Sunland company

    Balance sheet (Partial)

    Intangible assets:

    Patent is ($169,300 - $33,860) $135,440
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