Homework Answers
1. Patent at acquisition of Skunk
Cost of Skunk = $9,300,000
Book value acquired: (15,000,000 BR × $.60 = (9,000,000)
Patent in dollars = $300,000
Patent in BR's = ($300,000/$.60) = 500,000 BR
2. Patent amortization in dollars
Patent amortization in BR's (500,000/5 years) = 100,000 BR'
Patent amortization in $ (100,000 BR's × $.64 average rate) = $64,000
3. journal entry:
| account | debit | credit |
| Income from skunk | 64000 | |
| Investment in skunk | 28000 | |
|
Other comprehensive income—Equity adjustment from translation of patent |
36000 |
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