Jones Corporation purchased a patent for $600,000 on September 1, 2014. It had a useful life of 10 years. On January 1, 2016, Jones spent $120,000 to successfully defend the patent in a lawsuit. Jones feels that as of that date, the remaining useful life is 4 years. What amount should be reported for patent amortization expense for 2016

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2020-12-12T15:52:35+01:00

Answer:

$160,000

Explanation:

Calculation for What amount should be reported for patent amortization expense for 2018

First is to calculate the Amortization amount

Amortization=$600,000-[($600,000/10 years)x(4/3)

Amortization=$600,000-$80,000

Amortization=$520,000

Now let calculate amount that should be reported for patent amortization expense for 2018

2018 Patent amortization expense=($520,000+$120,000)/4years

2018 Patent amortization expense=($520,000+$120,000)/4years=90,000

2018 Patent amortization expense=$640,000/4years

2018 Patent amortization expense=$160,000

Therefore What amount should be reported for patent amortization expense for 2018 is $160,000