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mezya [45]
2 years ago
6

Blue Co. has a patent on a communication process. The company has amortized the patent on a straight-line basis since 2014, when

it was acquired at a cost of $36 million at the beginning of that year. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the end of 2018 (before adjusting and closing entries). What is the appropriate patent amortization expense in 2018?
Business
1 answer:
raketka [301]2 years ago
7 0

Answer:

Appropriate patent amortization expense = $10 million

Explanation:

As per the data given in the question,

Annual amortization expense = Cost ÷ Time

= $36 ÷ 9

= $4 million

Year 2018 Amortization Expense 4 Years = $4 million × 4

= $16 million

Unamortized cost = $36 million - $16 million

= $20 million

Year 2018 Amortization expense 4 years = $20 million ÷ 2

= $10 million

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Zigmanuir [339]

Answer:  b. ​Economies of Scope

Explanation:

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Economies of Scope in effect points out that there are some goods that when produced in tandem with another, lead to a cost reduction which means that its savings is <em>based on variety</em>.

Goods that usually achieve Economies of Scope are goods that are compliments, produced by similar methods or use similar inputs for production.

Firm A merging with Firm B produced the 5 radios and batteries cheaper so the new company is experiencing Economies of Scope.

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3 years ago
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olga_2 [115]
Corporation goes in the blank
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Prompt
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8 0
3 years ago
Find the following values for a lump sum assuming annual compounding. a. The future value of $800 invested at 7% for one year b.
Dmitrij [34]

Answer:

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(B)1,122.04

(C) and (D) thre present value will be 800

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\frac{856}{(1 + 0.07)^{1} } = 800

\frac{1,122.04}{(1 + 0.07)^{5} } = 800

5 0
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Kamila [148]

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