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Kleen Company acquired patent rights on January 10 of Year 1 for $2,800,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $38,000.

Determine the patent amortization expense for Year 4 ended December 31.

Respuesta :

Answer:

$357,600

Explanation:

The computation of the patent amortization expense for Year 4 ended December 31 is shown below:

= (Acquired value of patent rights) ÷ (legal life) + (Cost of the patents in a lawsuit) ÷ (Number of years)

= ($2,800,000) ÷ (8 years) + ($38,000) ÷ (4)

= $350,000 + $7,600

= $357,600

We simply considered the both values and according to that we take the number of years given in the question

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