Hit and Miss, Inc

Multiple Choice

Hit and Miss, Inc. purchased a patent at the beginning of 2011 for $250,000. Economic benefits were expected for 10 years, but the patent's legal life was 20 years. Also during 2011, the company incurred research and development costs of $270,000. Patent amortization expense for 2011 is:

A) $12,500
B) $26,000
C) $52,000
D) $25,000