Rinky-Dink Inc. incurred research and development costs of $200,000 and legal fees of $100,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should the company record as patent amortization expense in the first year?
A. $10,000
B. $15,000
C. $20,000
D. $30,000
Answer:A
Rinky-Dink Inc. incurred research and development costs of $200,000 and legal fees of $100,000 to acquire a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should the company record as patent amortization expense in the first year?
A. $10,000 B. $15,000 C. $20,000 D. $30,000