Day Company purchased a patent on January 1 2017 for 640000

Day Company purchased a patent on January 1, 2017 for $640,000. The patent had a remaining useful life of 10 years at that date. In January of 2018, Day successfully defends the patent at cost of $288,000, extending the patent\'s life to 12/31/29. What amount of amortization expense would Day record in 2018?

A) $64,000

B) $72,000

C) $77,000

D) $96,000

(I need to see the work, please)

Solution

Answer

B ) 72000

amount of amortization expense in 2018 = 640000 - 64000 + 288000 /12

= 576000 + 288000 / 12

= 864000 / 12

= 72000