Blue Co Has a Patent on a Communication Process

question 82

Multiple Choice

Blue Co. has a patent on a communication process. The company has amortized the patent on a straight-line basis since 2014, when it was acquired at a cost of $36 million at the beginning of that year. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the end of 2018 (before adjusting and closing entries) . What is the appropriate patent amortization expense in 2018?

• A) $4 million.
• B) $5 million.
• C) $10 million.
• D) $20 million.

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Definitions:

Selective Perception

The process whereby people see only those things that reinforce their preconceived perceptions.

Illustrative Example

An example used to illustrate or explain a concept, idea, or principle more clearly.

Process

A series of actions or steps taken to achieve a particular outcome or to transform inputs into outputs.

Racial Group

A category of people identified by shared physical or social qualities into groups considered by society to be socially significant, often based on characteristics like skin color or ancestry.