Use the following to answer questions
On January 1,2016,the Vanguard Company purchased a copyright for $12,000.Vanguard estimated the remaining useful life of the copyright to be 6 years.
-Which of the following correctly shows the effect of the first year's amortization of Vanguard's copyright?

Question

Use the following to answer questions 
On January 1,2016,the Vanguard Company purchased a copyright for $12,000.Vanguard estimated the remaining useful life of the copyright to be 6 years.
-Which of the following correctly shows the effect of the first year's amortization of Vanguard's copyright?

Quizplus · Accepted Answer

The first year's amortization expense for the copyright would be $2,000 ($12,000 divided by the remaining useful life of 6 years). This reduces the value of the copyright to $10,000 ($12,000 minus $2,000). Therefore, choice B correctly shows the effect of the first year's amortization.

Use the Following to Answer Questions