Solution-What amount should be amortized for the year

What amount should be amortized for the year

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Q1. Sandhill purchased a patent from Vania Co. for $1,300,000 on January 1, 2020. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2030. During 2022, Sandhill determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the statement of financial position for the patent, net of accumulated amortization, at December 31, 2022?

Q2. Sandhill purchased the license for distribution of a popular consumer product on January 1, 2022, for $160,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Sandhill can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2022?

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What amount should be amortized for the year

Reference no: EM133061907

Reference no: EM133061907

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