1. On January 1, 2018, Tabitha Designs purchased a patent that gave it exclusive rights to manufacture a new type of synthetic clothing for $240,000. Although the patent had a remaining legal life of 15 years at the time of purchase, Tabitha expects the lifespan to be only eight more years. Additionally, Tabitha purchased equipment related to the production of new clothing for $140,000. The equipment has a physical life of 10 years, but Tabitha plans to use the equipment only for the life of the patent and then sell it for an estimated value of $20,000. Tabitha uses the straight line for all long-term assets. The amount of the expense in 2021 related to the patent and the equipment must be:

2. Russell Enterprises acquired a franchise from Michael Incorporated for $300,000. The franchise agreement is for a period of six years. Russell uses the straight line to amortize all intangible assets. What would be the reported book value of the franchise two years after purchase?

3. Herman Apparel purchased equipment on January 1, 2015 for $560,000. In 2015-2017, Herman depreciated the asset on a straight-line basis with an estimated useful life of eight years and a residual value of $80,000. In 2018, Herman began to change its business strategy and now believes the equipment will only be used for two more years (five years total), but you don't think the salvage value has changed. What depreciation would Herman record for the year 2018 on this equipment?