Ramirez Stores purchased a trademark at the beginning of 2017 for $340,000.Economic benefits were expected for ten years,but the trademark's legal life was 20 years.Also,during 2017,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2017,is

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The book value of the trademark at December 31, 2017, is $306,000. This is calculated by taking the initial cost of the trademark ($340,000) and subtracting the amortization for one year. Since the economic benefits are expected for ten years, the annual amortization is $340,000 / 10 = $34,000. Therefore, $340,000 - $34,000 = $306,000. Research and development costs are expensed as incurred and do not affect the book value of the trademark.

Ramirez Stores Purchased a Trademark at the Beginning of 2017