Jason Purchases a Patent at a Cost of $24,000

question 80

Multiple Choice

Jason purchases a patent at a cost of $24,000. The patent has 8 years of legal life remaining from the date of purchase.
I.If the patent is the only asset Jason purchased, he must amortize the patent over 15 years.
II.If the patent was part of the purchase of all the assets of a business, he must amortize the patent over 15 years.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Cover

A remedy in sales law allowing a buyer to purchase replacement goods if the seller fails to make delivery.

Specific Performance

A legal remedy where a court orders the party breaching a contract to perform the contract's specific duties rather than paying monetary damages.

Assignee

A person or entity to whom rights or interests have been transferred by another, known as the assignor.

Contractual Rights

Legal rights granted to parties within a contract, allowing them to demand the performance of certain duties outlined in the agreement.