Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assume the company uses the straight-line method to record amortization.
What is the carrying value of the copyright at the end of the second year?
A) $10,000.
B) $40,000.
C) $50,000.
D) $30,000.
Answer: D
Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assume the company uses the straight-line method to record amortization.
What is the carrying value of the copyright at the end of the first year?
A) $0.
B) $10,000.
C) $50,000.
D) $40,000.
Answer: D
Berry Co. purchases a patent on January 1, 2021, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the amortization expense for the year ended December 31, 2022?
A) $0.
B) $8,000.
C) $16,000.
D) $40,000.
Answer: B
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