Rinky-Dink Inc. leased manufacturing space for a 25-year period. Prior to using the space, Rinky-Dink needed to make renovations costing $80,000 with an expected useful life of 10 years. If the company uses the straight-line method, what amount should Rink-Dink record as amortization expense in the first year?
A) $8,000
B) $3,200
C) $4,800
D) The answer cannot be determined with the information provided.

Question

Quizplus · Accepted Answer

The amortization expense for the first year is $8,000. This is calculated by dividing the cost of the renovations ($80,000) by the useful life of the renovations (10 years).