Alatorre purchased a patent from vania co. for $1,000,000 on january 1, 2015. the patent is being amortized over its remaining legal life of 10 years, expiring on january 1, 2025. during 2017, alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. what amount should be reported in the balance sheet for the patent, net of accumulated amortization, at december 31, 2017?

accumulated amortization patent 400,000 dollars

Explanation:

patent original cost: 1,000,000

amortized for 2 years (2015 and 2016) with a useful life of 10 years:

1,000,000 / 10 = 100,000 per year x 2 years = 200,000

1,000,000 - 200,000 = 800,000

Now, as new information is determined we concluce the original useful life was 6 years from acquisition thus, leaving 4 years

800,000 current value / 4 years = 200,000 amortization for 2017

For a total of 200,000 previous + 200,000 for 2017 = 400,000