Blue CoHas a Patent on a Communication Process

question 100

Multiple Choice

Blue Co.has a patent on a communication process.The company has amortized the patent on a straight-line basis since 2012,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 2016 (before adjusting and closing entries) .What is the appropriate patent amortization expense in 2016?

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

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