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Paulsen incurred $55,000 of research and experimental expenses and began amortizing them over 60 months during June of year 1. During May of year 3, Paulsen received a patent based upon the research being amortized. $36,000 of legal expenses for the patent was incurred.
1) What is the basis of the patent, rounding amortization for each year to the nearest whole number?
2) What is the amortization expense with respect to the patent during the year it was issued, rounded to the nearest whole number?
Paid-In Capital
The quantity of funds a corporation has obtained from its investors as compensation for shares of the company's stock.
Paid in Capital in Excess
Funds received from shareholders over and above the par value of the stock issued, also known as additional paid-in capital.
Preferred Stock
A type of stock that gives its holders preference over common stockholders in terms of dividends and asset liquidation.
Building
An asset category in accounting representing the physical structure owned by a company, used for operations or rental.
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