1. ELO Corporation purchased a patent for $180,000 on September 1, 2006. It had a useful life of 10 years. On January 1, 2008, ELO spent $44,000 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2008?
2. In January, 2002, Findley Corporation purchased a patent for a new consumer product for $720,000. 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 ten years. During 2007 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 2007, assuming amortization is recorded at the end of each year?© BrainMass Inc. brainmass.com December 15, 2022, 7:45 pm ad1c9bdddf
The amortization per year is 180,000/10=18,000
Amortization till Dec 31, 2007 (16 months) = 18,000/12X16 = 24,000
Book value as on Jan ...
The solution explains how to calculate the amount of patent amortization