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 carrying value of the patent on December 31, 2013?

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The annual amortization expense is $8,000 ($40,000 / 5 years). After two years, the accumulated amortization is $16,000 ($8,000 x 2). The carrying value on December 31, 2013, is $24,000 ($40,000 - $16,000).

Berry Co Purchases a Patent on January 1, 2012, for $40,000