Jorge purchased a copyright 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?
A) $0
B) $6,000
C) $5,500
D) $12,000
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The copyright has a remaining life of 75 months, and the purchase occurred on July 15th. This means that there are 5.5 months of amortization expense in the current year (75 months / 12 months per year * 5.5 months). The amortization expense is calculated as the purchase price divided by the remaining life, so the total amortization expense Jorge may deduct during the current year is $75,000 / 75 months * 5.5 months = $6,000.

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