During the year just ended, Jase Co. incurred research and development costs of $136,000 in its laboratories relating to a patent that was granted on July 1. Costs of registering the patent equaled $34,000. The patent’s legal life is 20 years, and its estimated economic life is 10 years. In its December 31 balance sheet, what amount should Jase report for the patent, net of accumulated amortization?

$34,000 - {(34000 * 10)*6/12}

= 34000 - 1700

= $32,300 should be reported in the balance sheet as at December 31

Step-by-step explanation:

According to US Generally Accepted Accounting Principles (GAAP), most research and development cost are to be expenses in the year they are incurred as opposed to IFRS that permits the capitalization of development aspect of R&D cost.

Therefore the $136,000 is expensed in the income statement while the costs of registering the patent - $34,000 should be capitalized as an intangible asset in the balance sheet.

Amortization is computed on lesser of legal life and economic life = 10 years

∴ 34000/10 = $3400 for a year

since the patent was registered in July, amortization is for half of the year year

= 3400 * 6/12 = $1700

ou would have 12 of each

5.25 ounces

step-by-step explanation:

divided 3/4 and 6