QUESTION 27 1 points Save An engineering firm acquired a patent on January 1, 20x1 for $140,000. The patent had an original legal life of 20 years. On January 1, 20x1, when the patent was acquired by the engineering firm, it had a remaining legal life of 8 years. This patent is expected to be of value to the firm's operations for the next 4 years, through December 31, 20X5. What is the annual patent amortization expense that will appear on the income statement for the year ended December 31, 20X3? a. $52,500. Ob.$10,500. Oc. $17,500. O d. $35,000. An engineering firm acquired a patent on January 1, 20X1 for $140,000. The patent had an original legal life of 20 years. On January 1, 20X1. when the patent was acquired, it had a remaining legal life of 8 years. This patent is expected to be of value to the firm's operations for the next 4 years, through December 31, 20X5. What will be the book or carrying value of the intangible asset Patents net of patent amortization on the firm's statement of financial position as of December 31, 20X3? a. $50,000 Ob.$70.000 c. $35,000 d. $105,000 Answer: c. Patent cost... ......$140,000 Less: Patent amortization through December 31, 20X3*.... 105,000 Patent book value (net of amortization) on 12/31/20X3..... $35.000 * The patent is amortized over the shorter of its legal life on January 1, 20X1 (8 years) or its estimated economic life on that same date (4 years). Therefore, the patent's cost of $140,000 is divided by 4 years for annual patent amortization expense of $35,000. Patent amortization through 12/31/20X3 = 3 years x $35,000 = $105,000