On the last day of month 1, year 1, Findley Corporation purchased a patent for a
ID: 2422783 • Letter: O
Question
On the last day of month 1, year 1, Findley Corporation purchased a patent for a new consumer product for $22,771. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only 8 years. During year 3 the product was permanently removed from the market under governmental order because of a potential health hazard present in the product. What amount should Findley charge to expense during year 3, assuming amortization is recorded at the end of each year
Explanation / Answer
Answer: ($22771 ÷ 8) × 3 = $8539.125
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