Paulsen Incurred $55,000 of Research and Experimental Expenses and Began

question 79

Essay

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.The patent is expected to have a remaining useful life of 17 years.
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?

---

Definitions:

Hedger

An individual or entity that enters into a financial contract to mitigate the risk of adverse price movements in an asset.

Swap Contract

A financial agreement where two parties exchange liabilities or cash flows from two different financial instruments for a set period.

Forward Contracts

Customized contracts between two parties to buy or sell an asset at a specified price on a future date.

Stock Brokers

Professionals or firms that execute buy and sell orders for stocks and other securities on behalf of their clients, in exchange for a fee or commission.