In January of 20X1, the Phillips Company purchased a patent at a cost of $100,000. In addition, $10,000 in legal fees were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for intangible assets. In 20X3, Phillips spent $25,000 in legal fees for an unsuccessful defense of the patent. The amount charged to income (expense and loss) in 20X3 related to the patent should be:

Multiple Choice

• $103,000

• $36,000

• $113,000

• All of these answer choices are incorrect.