Rinky-Dink Inc.incurred research and development costs of $200,000 and legal fees of $100,000 to acquire a patent.The patent has a legal life of 20 years and a useful life of 10 years.What amount should the company record as patent amortization expense in the first year?
A)$10,000
B)$15,000
C)$20,000
D)$30,000

Question

Quizplus · Accepted Answer

The patent amortization expense for the first year is calculated as (Research and development costs + Legal fees) / Useful life = ($200,000 + $100,000) / 10 years = $30,000 / 10 years = $3,000 per year.