Question 1

Sandy is a CPA who works as an accountant for public company Hello Ltd. (Hello), a marketing agency. Sandy is currently making the year-end adjustments for the fiscal year ending June 30, 2020. One of the required adjusting journal entries is the amortization on a trademark that was purchased on September 1, 2019, for $90,000. The company has the legal right to use the trademark for 10 years. The company plans to use the trademark in advertising campaigns for one particular customer for the next six years. Hello amortizes intangible assets on a straight-line basis starting in the month of purchase.

What is the amortization to be recorded for the year ending June 30, 2020?

Question 1 options:

A-$7,500

B-$9,000

C-$12,500

D-$15,000