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Bates Company acquired patent rights on Jan 1, 2010 for $1,125,000. This has an estimated useful life of 10 years and incurred legal fees of $100,000. On January 1, 2012, the company successfully defended against a lawsuit in the amount of $100,000. The company had a total of R&D expenditures related to the patent of $300,000. Based on the information above:
A. What is the total cost of the patent and the amount of amortization expense for the year ending 2010?
B. At December 31 of 2012 what would be the total amount of amortization expense recorded for the year?
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