Thompson Corp purchased a software distribution license on March 1, 2024, for $240,000. The initial license term is 4 years, and Thompson can renew it indefinitely for additional 4-year terms by paying a small administrative fee. The software is expected to generate cash flows indefinitely. Calculate the amortization expense for the year ended December 31, 2024.

Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter9: Operating Activities
Section: Chapter Questions
Problem 18PC
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Thompson Corp purchased a software distribution license on
March 1, 2024, for $240,000. The initial license term is 4 years,
and Thompson can renew it indefinitely for additional 4-year
terms by paying a small administrative fee. The software is
expected to generate cash flows indefinitely. Calculate the
amortization expense for the year ended December 31, 2024.
Transcribed Image Text:Thompson Corp purchased a software distribution license on March 1, 2024, for $240,000. The initial license term is 4 years, and Thompson can renew it indefinitely for additional 4-year terms by paying a small administrative fee. The software is expected to generate cash flows indefinitely. Calculate the amortization expense for the year ended December 31, 2024.
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