At the beginning of the year, Big Time Tires acquired a patent for $800,000 and a trademark for $300,000. Big Time Tires' policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life. What is the total amount of amortization expense that would appear in Big Time Tires' income statement for the first year related to these items?
What will be an ideal response?
The patent would have amortization expense of $160,000 ($800,000/5 years). The trademark would not be amortized because it has an indefinite life.
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Which of the following would not be considered an investment?
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