Granite Enterprises Acquired a Patent from Southern Research Corporation on 1/1/09

question 101

Multiple Choice

Granite Enterprises acquired a patent from Southern Research Corporation on 1/1/09 for $4 million. The patent will be used for five 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 2009, assuming the straight-line method is used.

• A)$380,000
• B)$400,000
• C)$760,000
• D)$800,000 The $200,000 purchase commitment is treated as the residual value of the patent.Amortization is as follows:
• ($4,000,000 200,000) 5 years = $760,000

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Definitions:

Real Cigarette

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Control Group

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Sugar Pills

Placebo tablets made of inert ingredients, used in medical trials to examine the effect of treatments without drug involvement.

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Attention Deficit Hyperactivity Disorder, a behavioral condition characterized by inattention, hyperactivity, and impulsivity.