Amortization Expense Smith & Sons obtained a patent for a new optical scanning device. The fees incurred to file for the patent and to defend the patent in court against several companies which challenged the patent amounted to $45,000. Smith & Sons concluded that the expected economic life of the patent was 12 years. Calculate the amortization expense that should be recorded by Smith & Sons in the second year. $Answer

Question

contestada

Respuesta :

andromache andromache · Answer 1 · 2019-11-06T05:31:23+01:00

Answer:

The amortization expense that should be recorded by Smith & Sons in the second year is $3,750

Explanation:

The computation of the amortization expense in the second year is shown below:

= (Cost of patent) ÷ (expected economic life of the patent)

= ($45,000) ÷ (12 years)

= $3,750

The amortization expense should be the same for the expected life i.e 12 years

For more understanding, we pass the journal entry which is shown below:

Amortization expenses A/c Dr $3,750

To Patent A/c $3,750

(Being amortization expense recorded)

anthougo anthougo · Answer 2 · 2021-11-11T12:05:46+01:00

The amortization expense that Smith & Sons should record in the second year is $3,750.

Data and Calculations:

Cost of patent = $45,000

Expected economic life = 12 years

Amortization expense each year = $3,750 ($45,000/12)

Thus, the amortization expense for each of the economic life of the patent should be $3,750, using the straight-line method.

Learn more: https://brainly.com/question/15194253

Answer Link