The Lane Company Incurred the Following Expenditures in January 2016

question 13

Multiple Choice

The Lane Company incurred the following expenditures in January 2016: 1) research and development costs of $510,000 that resulted in a new product that was patented during the year, 2) $12,000 in legal fees to have the patent registered, 3) $100,000 in advertising costs to develop a trademark for the newly patented product, 4) Legal fees of $8,000 incurred with the registration of the trademark, which will only be used for five years, and 5) $25,000 of advertising costs to promote its good name. Benefits to be derived from the patent are expected to last for five years. The president believes the promotion of Lane's good name will benefit the firm for three years. How much amortization expense should Lane recognize for 2016?

• A) $1,000
• B) $4,000
• C) $9,000
• D) $25,000

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Definitions:

Identity Aspects

Various characteristics or features that make up an individual's sense of self.

Erikson

Erik Erikson, a developmental psychologist known for his theory on the psychosocial development of humans.

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Socially constructed roles, behaviors, activities, and attributes that a given society considers appropriate for men and women.

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The stress experienced by individuals who are exposed to a new and different culture, leading to feelings of confusion and anxiety.