Accounting
Jeff Corporation purchased a limited-life intangible asset for $120,000 on May 1, 2006. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2008?
$ -0-
$24,000
$32,000
$36,000
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Answers
$24,000. Amortization expense of intangible assets is typically calculated by taking the cost of the asset and dividing by its useful life, in this case 10 years. Thus, amortization expense in this example would be $12,000 per year. Since this asset was purchased May 1, 2006, the total amortization expense recorded by December 31, 2008 should be $24,000.
