On January 2, 2007, Mortensen, Ltd

question 28

Multiple Choice

On January 2, 2007, Mortensen, Ltd.purchased a patent for a new consumer product for $90,000.At the time of purchase, the patent was valid for 15 years; however, the patent's useful life was estimated to be only 10 years due to the competitive nature of the product.
On December 31, 2010, the product was permanently withdrawn from sale under
Governmental order because of a potential health hazard in the product.What amount should Mortensen charge against income during 2010, assuming amortization is recorded
At the end of each year?

• A)$72,000.
• B)$63,000.
• C)$54,000.
• D)$9,000.

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Definitions:

Initial Public Offerings

The process wherein a private company sells its shares to the public for the first time to raise capital.

Long Term

Refers to an extended period of time, especially in the context of investments or financial planning, typically over a year.

Initial Public Offering

The first sale of stock by a private company to the public, marking a transition from private to public ownership.

Book Building

A process by which an underwriter attempts to determine the price to offer for an initial public offering based on demand from institutional investors.