Question
On January 2, 2020, Gold Corp. bought a trademark from River Inc. for $ 100,000. An independent research company estimated that the remaining useful life
On January 2, 2020, Gold Corp. bought a trademark from River Inc. for $ 100,000. An independent research company estimated that the remaining useful life of the trademark was 25 years. At this time, the trademarks net book value in Rivers records was $ 160,000. Because the trademark had a demonstrated limited life beyond 20 years, Gold decided to amortize the trademark over the maximum period, straight-line with no residual. In Golds (calendar) 2020 income statement, what amount should be reported as amortization expense for this trademark?
a) $ 6,400
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b) $ 6,000
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c) $ 5,000
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d) $ 4,000 |
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