Chapter 9, Problem 11E

Calculating the Impact of Estimated Useful Lives of Intangible Assets

Refer to the data in E9-10. Assume each company spent $319,800 at the beginning of the current year for additional Developed Technology. Because of its proprietary nature, the technology is estimated to have no residual value at the end of its estimated life.

Required:

Calculate the impact (direction and amount) that the amortization of such expenditures would have on each company’s Income from Operations in the current year.