Smith Company acquired patent rights on January 6, 2013, for $882,000. The patent has a useful life equal to its legal life of nine years. On January 3, 2016, Smith successfully defended the patent in...

Smith Company acquired patent rights on January 6, 2013, for $882,000. The patent has a useful life equal to its legal life of nine years. On January 3, 2016, Smith successfully defended the patent in a lawsuit at a cost of $45,000. a. Determine the patent amortization expense for the year ended December 31, 2016. b. Journalize the adjusting entry to recognize the amortization.

a. Compute the book value of the fixed assets for the current year and the preceding year and explain the differences, if any.

b. Would you normally expect Apple’s book value of fixed assets to increase or decrease during the year?