This post addresses the total charge against income/patent.
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On January 2, 2008, Lava, Inc., purchased a patent for a new consumer product for $90,000. At the time of purchase, the patent was valid for 15 years; however, its useful life was estimated to be only 10 years due to the product's competitive nature. On December 31, 2011, the product was permanently withdrawn from sale under governmental order because of a potential health hazard in the product.
What should the total charge against income on this patent be in 2011?
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Solution Summary
The solution provides the exact total charge against income on the patent for Lava, Inc. This solution is written based on 25+ years of professional experience as an accountant and auditor.
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