Blossom Corporation purchased a patent for $385500 on September 1, 2019. It had a useful life of 10 years. On January 1, 2021, Blossom spent $95100 to successfully defend the patent in a lawsuit. Blossom feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2021

$85,840

Explanation:

Calculation for Blossom Corporation amount to be reported for patent amortization expense for 2021

First step is to calculate the amortization from 1 sept 2019 to January 1 2021 which is:

[($385,500 ÷ 10) × 1 +1/3]

=$38,550×1.3333333

= $51,400

Second step is to calculate for the remaining value before defence which is:

=$385,500-$51,400

=$334,100

The third step is to calculate for the cost of successful defence which is :

($334,100+ $95,100) ÷ 5

=$429,200÷5

= $85,840

Therefore the amount that should be reported for patent amortization expense for 2021 will be $85,840

answera major piece of legislation affecting the financial industry and containing significant privacy provisions for individuals;