Several years ago March Metals purchased for $120,000 a well-known trademark for padlocks and other security products. After using the trademark for three years, March Metals discontinued it altogether when the company withdrew from the lock business and concentrated on the manufacture of aircraft parts.

Amortization of the trademark at the rate of $3,000 a year is being continued on the basis of a 40-year life, which the owner of March Metals says is required by accounting standards. Do you agree? Explain.

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