Amortization expense smith & sons obtained a patent for a new optical scanning device. the fees incurred to file for the patent and to defend the patent in court against several companies which challenged the patent amounted to $45,000. smith & sons concluded that the expected economic life of the patent was 12 years. calculate the amortization expense that should be recorded by smith & sons in the second year. $answer

The amortization expense that Smith & Sons should record in the second year is $3,750.

Data and Calculations:

Cost of patent = $45,000

Expected economic life = 12 years

Amortization expense each year = $3,750 ($45,000/12)

Thus, the amortization expense for each of the economic life of the patent should be $3,750, using the straight-line method.

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The amortization expense that should be recorded by Smith & Sons in the second year is $3,750

Explanation:

The computation of the amortization expense in the second year is shown  below:

= (Cost of patent) ÷  (expected economic life of the patent)

= ($45,000) ÷ (12 years)

= $3,750

The amortization expense should be the same for the expected life i.e 12 years

For more understanding, we pass the journal entry which is shown below:

Amortization expenses A/c Dr $3,750

       To Patent A/c                           $3,750

(Being amortization expense recorded)

e would be the answer

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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