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23 November, 02:58

Jorge purchased a patent for use in his business in the current year. The purchase occurred on July 15th and the purchase price was $75,000. If the patent has a remaining life of 75 months, what is the total amortization expense Jorge may deduct during the current year?

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  1. 23 November, 03:17
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    The patent amortization expense that Jorge may deduct in the current year is $6000

    Explanation:

    Jorge purchased the patent in the 7th month of the year, from 7th till the end of year gives a total of 6 months, in other words, Jorge is able to amortize 6 months of patent in the year of purchase.

    Patent amortization expense=patent value*applicable months in the year/useful life of the patent

    patent value is $75000

    applicable months in the year is 6

    useful life is 75 months

    Patent amortization expense=$75000*6/75

    Patent amortization expense=$6000
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