On June 30, 2016, Mobley Corporation Acquired a Patent for $4

Essay

On June 30, 2016, Mobley Corporation acquired a patent for $4 million. The patent was estimated to have an eight-year life and no residual value. Mobley uses the straight-line method of amortization for intangible assets. At the beginning of January 2018, Mobley successfully defended its patent against infringement. Litigation costs totaled $650,000.
Required:
1. Calculate patent amortization for 2016 and 2017.
2. Prepare the journal entry to record the 2018 litigation costs.
3. Calculate amortization for 2018.
4. Repeat requirements 2 and 3 assuming that Mobley prepares its financial statements according to International Financial Reporting Standards (IFRS).