ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 43
for 2015, assuming that amortization is recorded on interest
payment dates using the effective-interest method.
5) Sisco Co. purchased a patent from Thornton Co. for
$620,000 on July 1, 2012. Expenditures of $119,000 for
successful litigation in defense of the patent were paid on July 1,
2015. Sisco estimates that the useful life of the patent will be 20
years from the date of acquisition.
Prepare a computation of the carrying value of the patent at
December 31, 2015.
6) On August 31, Latty Co. partially refunded $443,000 of its
outstanding 10% note payable made one year ago to Dugan
State Bank by paying $443,000 plus $44,300 interest, having
obtained the $487,300 by using $134,220 cash and signing a
new one-year $388,000 note discounted at 9% by the bank.