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On January 1, 2005, Technocraft, Inc., acquired a patent that was used for manufacturing semiconductor-based electronic circuitry. The patent was originally recorded in Technocraft’s ledger at its cost of $1,779,000. Technocraft has been amortizing the patent over an expected economic life of 10 years. Residual value was assumed to be zero. Technocraft sued another company for infringing on its patent. On January 1, 2012, Technocraft spent $180,000 on this suit and won a judgment to recover the $180,000 plus damages of $500,000. The sued company paid the $680,000.
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