[reo]

NINJA Question –

Any and all assistance is appreciated, thank you! It has been awhile since I’ve done accumulated amortization . . .

During the year ended December 31, 2014, Timberland Co. incurred research and development costs of $300,000 in its laboratories relating to a patent that was granted on July 1, 2015. Costs of registering the patent equaled $60,000. The patent’s legal life is 20 years, and its estimated economic life is 6 years. In its December 31, 2015 balance sheet, what amount should Timberland report for the patent, net of accumulated amortization?

$300,000

$270,000

$55,000

$40,000

Reo

[Lidis]

Answer C

60,000/6=10,000/2= 5,000 amortization from 07/01/15 – 12/31/15

60,000 – 5,000= 55,000

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