EX:$1$ In early January $2014,$ Reymont Corporation applied for a trade name, incurring legal costs of $$18,000.$ In January $2015,$ Reymont incurred $$7,800$ of legal fees in a successful defense of its trade name.

Instructions

$($a$)$ Compute $2014$ amortization, $12/31/14$ book value, $2015$ amortization, and $12/31/15$ book value if the company amortizes the trade name over $10$ years.

$($b$)$ Compute the $2015$ amortization and the $12/31/15$ book value, assuming that at the beginning of $2015,$ Reymont determines that the trade name will provide no future benefits beyond December $31,2018.$