Horizon Innovations incurred $120,000 in research and development costs and $60,000 in legal fees to acquire a patent. The patent has a legal life of 20 years and a useful life of 8 years. What amount should Horizon record as Patent Amortization Expense in the first year? a. $7,500 b. $15.000 c. $22,500 d. $0

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 6EA: Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of...
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Horizon Innovations incurred $120,000 in research
and development costs and $60,000 in legal fees to
acquire a patent. The patent has a legal life of 20
years and a useful life of 8 years.
What amount should Horizon record as Patent
Amortization Expense in the first year?
a. $7,500
b. $15.000
c. $22,500
d. $0
Transcribed Image Text:Horizon Innovations incurred $120,000 in research and development costs and $60,000 in legal fees to acquire a patent. The patent has a legal life of 20 years and a useful life of 8 years. What amount should Horizon record as Patent Amortization Expense in the first year? a. $7,500 b. $15.000 c. $22,500 d. $0
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