On January 1, 2017, Keebler Company purchased the copyright to Bodine Computer Tutorials for $81,000. It is estimated that the copyright will have a useful life of 5 years with an estimated residual value of $6,000. The amount of amortization expense recognized for the year 2017 would be

Question

Quizplus · Accepted Answer

To calculate the annual amortization expense, we first need to determine the depreciable cost of the copyright.

Depreciable Cost = Cost of Copyright - Residual Value 
Depreciable Cost = $81,000 - $6,000 
Depreciable Cost = $75,000

Next, we divide the depreciable cost by the useful life of the copyright.

Annual Amortization Expense = Depreciable Cost / Useful Life 
Annual Amortization Expense = $75,000 / 5 
Annual Amortization Expense = $15,000

Therefore, the amount of amortization expense recognized for the year 2017 is $15,000.

On January 1, 2017, Keebler Company Purchased the Copyright to Bodine