Whiteway Company has a December 31 fiscal year end
Whiteway Conpany has a December 31 fiscal year end. Selected information follows for Whiteway Company for two independent situations as at December 31, 2021:
Whiteway purchased a patent from Hompkins Inc. for $400,000 on Jan 1, 2018. The patent expires on Jan 1, 2026. Whiteway has been amortizing it over its legal life. During 2021, Whiteway determined that the patent's economic benefits would not last longer than six years from the date of acquisition.
Whiteway has a trademark that had been purchased in 2024 for $250,000. During 2020, the company spent $50,000 on a lawsuit that successfully defended the trademark. On Dec 31, 2021, it was assssed for impairment and the recoverable amount was determined to be $275,000.
Instructions:
a. For each of these assets, determine the amount that will be reported on Whiteway's December 31, 2020 and 2021, balace sheets.
b. For each of these assets, determine what, if anything, will be reported on Whiteway's 2021 income statement. Be specific about the amount name and the amount.
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