Jorge purchased a copyright for use in his business in the current year.The purchase occurred on July 15^th 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? A) $0 B) $5,500 C) $6,000 D) $12,000 E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The annual amortization expense is calculated by dividing the purchase price by the remaining life of the copyright in months and then multiplying by 12. 
Amortization Expense = Purchase Price / Remaining Life * 12
= $75,000 / 75 * 12
= $6,000
However, since the purchase occurred in the middle of the year, the amount that can be deducted in the current year is half of the annual expense. Therefore, the total amortization expense Jorge may deduct during the current year is $6,000/2 = $3,000.

Jorge Purchased a Copyright for Use in His Business in the Current