Berry Co.purchases a patent on January 1,2012,for $40,000 and the patent has an expected useful life of five years with no residual value.Assuming Berry Co.uses the straight-line method,what is the amortization expense for the year ended December 31,2013?

Question

Quizplus · Accepted Answer

The straight-line method spreads the cost of the asset evenly over its useful life, therefore to calculate the annual amortization expense, we divide the total cost by the useful life:
$40,000 / 5 = $8,000
Thus, the amortization expense for the year ended December 31, 2013, would be $8,000.

Berry CoPurchases a Patent on January 1,2012,for $40,000 and the Patent