Geithner LLC Patented a Process It Developed in the Current

question 71

Multiple Choice

Geithner LLC patented a process it developed in the current year.The patent is expected to create benefits for Geithner over a 10 year period.The patent was issued on April 15^th and the legal costs associated with the patent were $43,000.In addition,Geithner had unamortized research expenditures of $15,000 related to the process.What is the total amortization expense Geithner may deduct during the current year?

• A)$2,417
• B)$2,559
• C)$4,108
• D)$4,350
• E)None of these

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Definitions:

Capital Lease

A lease agreement that transfers substantially all the risks and benefits of ownership to the lessee, effectively treated as a purchase by the lessee.

Unguaranteed Residual Value

The estimated future value of an asset at the end of its lease term that is not guaranteed by the lessee or a third party.

Lease Obligation

A financial commitment to make future payments under a lease agreement.

Sales-leaseback Transaction

A financial arrangement where one sells an asset and immediately leases it back from the buyer, effectively freeing up cash while retaining the use of the asset.