Franklin Designs purchased the patent of a new couch design. The patent had a remaining life of 18 years, so Franklin amortized the cost of the patent over 18 years. However, experts believe that the couch design will only be popular for six years. How will this affect the accuracy of Franklins financial statements?

• A. Amortization expense will be understated, net income will be overstated, and assets will be overstated.
• B Amortization expense will be understated, net income will be understated, and assets will be overstated.
• C Amortization expense will be overstated, net income will be overstated, and assets will be overstated.
• D Amortization expense will be overstated, net income will be understated, and assets will be understated.

Answer is A Amortization expense will be understated, net income will be overstated, and assets will be overstated.