Granite Enterprises Acquired a Patent from Southern Research Corporation on January

question 3

Multiple Choice

Granite Enterprises acquired a patent from Southern Research Corporation on January 1,2016,for $4 million.The patent will be used for 5 years,even though its legal life is 20 years.Rocky Corporation has made a commitment to purchase the patent from Granite for $200,000 at the end of five years.Compute Granite's patent amortization for 2016,assuming the straight-line method is used.

• A)$380,000.
• B)$400,000.
• C)$760,000.
• D)$800,000.

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Definitions:

Inductive

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.

Deductive

Deductive reasoning involves drawing specific conclusions from a general statement or principle, often used in logical argumentation and mathematical proofs.

Logical

Pertaining to or characterized by clear, sound reasoning or a valid inference.

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