Question 16

Day Company purchased a patent on January 1, 2012 for $600,000. The patent had a remaining useful life of 10 years at that date. In January of 2013, Day successfully defends the patent at a cost of $270,000, extending the patent's life to 12/31/24. What amount of amortization expense would Kerr record in 2013?

Question 16 options:

A.	$60,000
B.	$67,500
C.	$72,500
D.	$90,000

Question 17

Riley Co. incurred the following costs during 2013:

Significant modification to the formulation of a chemical product	$160,000
Trouble-shooting in connection with breakdowns during commercial production	$150,000
Cost of exploration of new formulas	$200,000
Seasonal or other periodic design changes to existing products	$185,000
Laboratory research aimed at discovery of new technology	$275,000

In its income statement for the year ended December 31, 2013, Riley should report research and development expense of ____________.

Question 17 options:

A.	$635,000
B.	$785,000
C.	$820,000
D.	$970,000

Question 18

Tripiani Inc. incurred $800,000 of capitalizable costs to develop computer software during 2012. The software will earn total revenues over its 5-year life as follows: 2012 - $500,000; 2013 - $600,000; 2014 - $600,000; 2015 - $200,000; and 2016 - $100,000. What amount of the computer software costs should be expensed in 2012?

Question 18 options:

A.	$200,000
B.	$160,000
C.	$180,000
D.	$266,667

Question 19

Tripiani Inc. incurred $900,000 of capitalizable costs to develop computer software during 2012. The software will be used internally over its 5-year life. What amount of the computer software costs should be expensed in 2012?

Question 19 options:

A.	$900,000
B.	$180,000
C.	$202,500
D.	$300,000

Question 20

In January, 2008, Findley Corporation purchased a patent for a new consumer product for $960,000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. During 2013 the product was permanently removed from the market under governmental order because of a potential health hazard present in the product. What amount should Findley charge to expense during 2013, assuming amortization is recorded at the end of each year?

Question 20 options:

A.	$640,000
B.	$480,000
C.	$96,000
	$64,000