Berry Co.purchases a patent on January 1,2018,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 31,2019?

Question

Quizplus · Accepted Answer

Using the straight-line method, the annual amortization expense is calculated as follows:

Total cost of the patent = $40,000 
Useful life of the patent = 5 years

Therefore, the annual amortization expense is:

$40,000/5 years = $8,000 per year

For the year ended December 31, 2019, the patent was owned for 2 years (2018 and 2019). Therefore, the amortization expense for the year ended December 31, 2019, would be:

$8,000/year x 2 years = $16,000

Therefore, the answer is B) $8,000.

Berry CoPurchases a Patent on January 1,2018,for $40,000 and the Patent