- This topic has 6 replies, 3 voices, and was last updated 8 years, 9 months ago by .
-
Topic
-
Northstar Co. acquired a registered trademark for $600,000. The trademark has a remaining legal life of five years, but can be renewed every 10 years for a nominal fee. Northstar expects to renew the trademark indefinitely. What amount of amortization expense should Northstar record for the trademark in the current year?
a. $120,000
b. $15,000
c. $0
d. $40,000CORRECT ANSWER: C
MY ANSWER: A***I was under the impression that typically you account for things when they happen regardless of expectation, and adjust if the expectation is correct.
Can you explain why in this case you would follow the expectation instead of adjusting once renewed?
Viewing 6 replies - 1 through 6 (of 6 total)
Viewing 6 replies - 1 through 6 (of 6 total)
- The topic ‘Can You Explain Why….? (Practice Q)’ is closed to new replies.