Geithner LLC patented a process it developed in the current year.The patent is expected to create benefits for Geithner over a 10-year period.The patent was issued on April 15ᵗʰ and the legal costs associated with the patent were $43,000.In addition,Geithner had unamortized research expenditures of $15,000 related to the process.What is the total amortization expense Geithner may deduct during the current year?
A) $2,417
B) $2,174
C) $4,108
D) $4,350
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The total amortization expense Geithner may deduct during the current year is calculated as follows:

(43,000 legal costs + 15,000 unamortized research expenditures) / 10-year life of the patent = $5,800 annual amortization expense

Since the patent was issued on April 15ᵗʰ, Geithner may only deduct the amortization expense for the remaining nine months of the year:

$5,800 x 9/12 = $4,350

Therefore, the correct answer is D) $4,350.

Geithner LLC Patented a Process It Developed in the Current