Question

Riser Corporation was granted a patent on a product on January 1, 1998. To protect its patent, the corporation purchased on January 1, 2007 a patent on a competing product which was originally issued on January 10, 2003. Because of its unique plant, Riser Corporation does not feel the competing patent can be used in producing a product. The cost of the competing patent should be

Answer 1

Answer:

c. amortized over a maximum period of 11 years.

Explanation:

The patent is an intangible assets which is to be reported on the current asset side of the balance sheet

Like other intangible asset i.e goodwill, trademarks, and other intellectual properties are also shown on the asset side of the balance sheet

These assets should be amortized, not it is depreciated

In the given case, the patent should be amortized over a maximum period of 11 years