Pocono CoPurchased a Patent at the Beginning of 2016 for $490,000

question 52

Multiple Choice

Pocono Co.purchased a patent at the beginning of 2016 for $490,000 Economic benefits were expected for 7 years, but the patent's legal life was 20 years.Also during 2016, the company incurred research and development costs of $150,000.Patent amortization expense for 2016 is

• A) $24,500
• B) $150,000
• C) $72,143
• D) $70,000

Recognize the accounting treatment for changes in depreciation estimates and method changes.

Evaluate the reasoning behind asset depreciation and the non-recognition of fair value changes during asset lifetime.

Apply the straight-line method of depreciation and comprehend its effects on financial statements.

Comprehend the effects of asset revision in useful life and salvage value on depreciation calculations.

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Definitions:

Rationalizations

The process of attempting to logically justify behaviors or attitudes with plausible but not always genuine reasons.

Criminals

Individuals who have committed actions that violate laws and are therefore subject to legal penalties.

Participant Observation

A qualitative research method in which the researcher immerses themselves in the environment they are studying, participating in the activities while observing the setting and individuals within it.

Validation

The process of confirming or verifying something as true, correct, or compliant with standards.