71 the cost of a copyright should a be amortized over a period not to exceed the lif 4313757

71 the cost of a copyright should a be amortized over a period not to exceed the lif 4313757

71.The cost of a copyright should

a.be amortized over a period not to exceed the life of the author plus 50 years.

b.be amortized over a period not to exceed 20 years, unless the right is renewed.

c.not be amortized and the cost should be capitalized as an asset with indefinite life.

d.be amortized over a period not to exceed its economic life.

72.A patent is amortized over its expected useful life or 20 years. The expected useful life can be impacted by all of the following except

a.a unsuccessful lawsuit against a competitor.

b.the federal government renewing the original patent.

c.technical innovations by a competitor.

d.product improvements by the patent holder.

73.R Company registered a patent on January 1, 2015. PCompany purchased the patent from R Company for $450,000 on January 1, 2020, and began to amortize the patent over its remaining legal life. In early 2021, P Company determined that the patent's economic benefits would last only until the end of 2025. What amount should P Company record for patent amortization in 2021?

a.$90,000

b.$84,000

c.$70,000

d.$30,000

74.During 2016, Frank Company incurred $200,000 in legal fees in defending a patent with a carrying value of $3,500,000 against an infringement. Farver's lawyers were successful with the defense of the patent. The legal fees should be

a.expensed in 2016 and classified as ordinary expense.

b.classified as an extraordinary item on the income statement for 2016.

c.capitalized and amortized over the remaining legal life of the patent.

d.capitalized and amortized over the remaining economic life or legal life of the patent, whichever is shorter.

75.During 2016, Debbie Company incurred $240,000 in legal fees in defending a patent with a carrying value of $4,500,000 against an infringement. Debbie's lawyers were not successful with the defense of the patent. The legal fees should be

a.expensed in 2016 and classified as ordinary expense.

b.classified as an extraordinary item on the income statement for 2016.

c.capitalized and amortized over the remaining legal life of the patent.

d.capitalized and amortized over the remaining economic life or legal life of the patent, whichever is shorter.

76.In January 2014, the Jennifer Corporation purchased a patent for $231,000 from Travis Company that had a remaining legal life of 14 years. Jennifer estimated that the remaining economic life would be seven years. In January 2018, the company incurred $30,000 in legal costs to defend the patent from an infringement. Jennifer's lawyers were successful, and the remaining years of benefit from the patent were estimated to be six years. The patent amortization expense for 2018 is

a.$7,615

b.$9,923

c.$16,500

d.$21,500

77.The amortization period for a patent is

a.indefinite; patents should be reviewed for impairment annually.

b.20 years.

c.20 years or the expected useful life of the patent, whichever is longer.

d.20 years or the expected useful life of the patent, whichever is shorter.

78.In January 2014, Western Co. purchased a patent for $750,000 that had an estimated remaining economic life of ten years. On January 2, 2017, the company incurred $140,000 in legal fees to successfully defend the validity of the patent. In January 2019, the company incurred $88,000 in legal fees in a new infringement lawsuit. In this situation, the lawsuit was lost, and the patent was determined to be worthless as a result. The expense to be recognized in 2019 by Western with regard to the patent is

a.$750,000

b.$150,000

c.$475,000

d.$563,000

79.In 1975, Riveria Company had acquired copyrights for $750,000 on several literary works from some obscure 18th century authors. These copyrights were fully amortized by 2015. In early 2015, a new anthropological discovery made these copyrights worth $2,500,000. As a result, Riveria should report which of the following in its financial statements for 2015?

a.$2,500,000 as a holding gain

b.$750,000 as copyrights-based recovery of value limited to historical cost

c.$2,500,000 as an extraordinary item

d.Cannot be recognized under U.S. GAAP in the financial statements

80.Debbie acquired a franchise to operate a donut shop from Dollar Donuts, Inc., for $100,000. She incurred an additional $4,000 in legal costs to negotiate the terms with the franchiser. In five years, the franchise contract will be renegotiated. The current contract also states that there will be a $3,000 annual fee plus a two percent charge based on the store's annual revenue, which is expected to average 90,000 per year. The franchise cost that should be capitalized is

a.$88,000

b.$92,000

c.$100,000

d.$104,000

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