At the end of 2016, Mirror Productions determined that one of its copyrights was worthless.The copyright had a cost of $320,000.The copyright had been amortized for 8 years of its estimated 25-year legal life.Which of the following statements is the justification for removing the remaining cost of the copyright from the accounting records?
A) The copyright no longer represents a future benefit to the company.
B) The federal government does not allow copyrights to be recorded as assets once they are deemed worthless.
C) The cost of the copyright represents an obligation to return capital contributions to the stockholders.
D) The cost of the copyright has usefulness that will impact the net income of future accounting periods.

Question

Quizplus · Accepted Answer

The justification for removing the remaining cost of the copyright from the accounting records is that it no longer represents a future benefit to the company. Once it has been determined that the copyright is worthless, it cannot generate any future cash flows, so it should be written off. Options B, C, and D do not apply to the situation.

At the End of 2016, Mirror Productions Determined That One