[reo]

Any and all assistance is appreciated, thank you!

Recount Company purchased the license for distribution of a popular consumer product on January 1, 2015, for $200,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Recount can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2015?

A – $0

B – $10,000

C – $20,000

D – $40,000

Reo

[Meeekks]

It's 0 because the company can renew the license indefinitely and the license generates cash flows indefinitely. I'm pretty sure this is the answer but I could be wrong.

[Anonymous]

I would say -0- is the correct answer. This patent has no definite life obviously so you cannot amortize it. Just like GW.

Am I correct?

[mommyof3texans]

I think it's 0 also, pretty sure you need a finite life to amortize and they give a few clues it's not finite.

BEC - 02/21/15 - 82
FAR - 05/29/15 - 82
AUD - 07/09/15 - 93
REG - 11/14/15 - 80

All done!!!

[Author]

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