The Mario Company Was Organized at the End of 2015

question 20

Essay

The Mario Company was organized at the end of 2015. The following items acquired on January 1, 2016, were listed by the company as intangible assets at the end of 2016: At the beginning of 2016, Mario also purchased a research building at a cost of $275,000. The company estimates that the building will be used in numerous projects over a 20-year period. During the year, Mario spent $75,000 on research and development materials and salaries. In early January 2016, Mario purchased a patent for $75,000 that was used exclusively for a single research project conducted during 2016. Mario uses straight-line amortization over the maximum allowable periods. In addition, on July 1, 2016, Mario incurred legal fees of $25,400 to defend the new patent that had been acquired for $80,000. Mario's lawyers were successful in the defense of the patent.
Required:
Determine the amortization expense for intangibles for 2016. Mario calculates amortization expense to the nearest month.

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Definitions:

Real Nature

The essential qualities or characteristics of something or someone, often considered inherent and authentic.

Bicultural Identity Integration

Refers to the extent to which individuals can merge their original cultural background with that of another culture, influencing their sense of identity and social adaptation.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by prejudice against other groups.

Cultural Relativism

The principle that an individual's beliefs and activities should be understood by others in terms of that individual's own culture.