At the End of 2013,Clock Products,Inc

question 173

Multiple Choice

At the end of 2013,Clock Products,Inc.determined that one of its patents was worthless.The patent had a cost of $300,000.The patent had been amortized for 5 years of its estimated 15-year legal life.Which of the following statements is correct?

• A)Clock Products must continue to amortize the patent over its remaining 10 years of life.
• B)The patent must be reduced to 5/15,or 33.3% of its original cost and amortized over the remaining 10 years.
• C)The remaining unamortized cost must be removed from the accounting records and treated as a loss on the income statement.
• D)Clock Products must correct its financial statements for the past five years,so that the entire cost is allocated to that fie year period.