The Lake Superior Company has spent a total of $153,000 at the beginning of 2000

Question

The Lake Superior Company has spent a total of $153,000 at the beginning of 2000 in acquiring patents for its state-of-the-art computerized air conditioners. At the beginning of 2002 the company paid legal fees of $25,000 to attorneys for representation during a patent infringement suit. The company has always expected the patents to be useful over their legal lives. As of January 1, 2003 the company receives information regarding new technology breakthroughs in computerized air-conditioning. As a result Lake Superior expects its patents to have a remaining useful life of three years. What is the amount of amortization for 2003?
a. $9,000 b. $39,998 c. $49,778 d. $50,000
please show work or explain

Explanation / Answer

153000/17=9000 2000 9000 2001 153000-18000+25000=160,000 160,000/15=10,666 2002 160,000-10,666=149334 149334/3=49778 2003 c.

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