On January 1, 2012, Hess Co

question 93

Multiple Choice

On January 1, 2012, Hess Co. purchased a patent for $952,000. The patent is being amortized over its remaining legal life of 15 years expiring on January 1, 2027. During 2015, Hess determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2015?

• A) $571,200
• B) $652,800
• C) $672,000
• D) $698,200

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Definitions:

Note Receivable

A financial asset representing a written promise to receive a certain amount of money at a future date.

Interest Earned

The amount of income earned from depositing funds or investing in interest-bearing financial instruments.

Balance Sheet

A report cataloging a company's total assets, financial obligations, and equity owned by shareholders at a specific moment.

Services Provided

Activities performed by a company or an individual to fulfill the needs or requirements of its customers, without resulting in the ownership of any physical products.