Question

34) Hepburn Company bought a copyright for $165,600 on January 1, 2015, at which time the copyright had an estimated useful life of 24 years. On January 5, 2018, the company determined that the copyright would expire at the end of 2021. How much should Hepburn record as amortization expense for this copyright for 2018? (Do not round your intermediate calculation and round your answer to the nearest dollar amount.)

Multiple Choice

$1,380.

$6,900.

$36,225.

$460.

Answer 1

Ans:- Copyright amount = 1,65,600

Amortisation amount in Year 2015 = Copyright amount/ No. of Estimated years

= 165600/24

= 6900

    Amortisation amount in Year 2016 = 6900

Amortisation amount in Year 2017 = 6900

Total Amortised amount till year 2017 = 6900*3 = 20700

Total unamorised amount in beginning of year 2018 = 165600- 20700 = 144900

Revised estimated life in year 2018= 4 year i.e. 2018, 2019, 2020, 2021

So amortised amount in year 2018 = Unamorised amount/ revised estimated life

= 144900/4

= 36225

So answer is $ 36225.