Day Company purchased a patent on January 1, 2010 for $360,000.The patent had a remaining useful life of 10 years at that date.In January of 2011, Day successfully defends the patent at a cost of $162,000, extending the patent's life to 12\31\22.What amount of amortization expense would Kerr record in 2011?

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The patent was purchased for $360,000 and had a remaining useful life of 10 years at that date. This means that the annual amortization expense would be $36,000 ($360,000 / 10). In January of 2011, Day successfully defends the patent at a cost of $162,000, extending the patent's life to 12/31/22. This means that the remaining useful life of the patent is now 12 years. The new annual amortization expense would be $40,500 ($360,000 + $162,000 / 12).

Day Company Purchased a Patent on January 1, 2010 for $360,000.The