Assessment 4: On January 1, Year 1, Martin Manufacturing Company paid... On January 1, Year 1, Martin Manufacturing Company paid $55,000 to obtain a patent. Martin expected the patent to have a 25 year useful life and a $5,000 salvage value. The patent's legal life is 20 years. Which of the following shows how the recognition of amortization expense will affect the Year 3 financial statements? + Assets A. (2,000) B.|(2,500) C. (2,500) D. (2,000) Balance sheet = Liab. + Equity Rev. = + + (2,000) NA = + + (2,500) | NA = + (2,500) NA = + (2,000) NA Income Statement - Exp. = Net Inc. - 2,000 = (2,000 - 12,500 = |(2,500) - 2,500 = (2,500) - 2,000 = (2,000) Statement of Cash Flows 2,000 OA NA (2,500) OA + + +