# The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for$70,000. Determine the annual amortization amount for each intangible asset.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 11, Problem 11EB
Textbook Problem
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## The following intangible assets were purchased by Hanna Unlimited:A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000.B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for$70,000.Determine the annual amortization amount for each intangible asset.

To determine

(a)

Introduction:

The assets that do not have any physical appearance and cannot be seen or touched are known as intangible assets. However, future benefits are expected to arise from the use of such assets in the same manner as it is expected in case of tangible assets.

To calculate:

The annual amortization amount over which Company H would amortize a patent.

### Explanation of Solution

Company H will amortize the patents over their estimated useful life of six years. The useful life can be less than twenty years because of the swift changes in the technology.

Calculation of the amortized amount for the patents:

AmortizedAmount=PurchaseCostofthePatentEstimatedUseful

To determine

(b)

To calculate:

The annual amortization amount over which Company H would amortize a copyright.

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