Mitzy's Muffins Ltd

Multiple Choice

Mitzy's Muffins Ltd.purchased a commercial baking system for $150,000 at the beginning of 20X1.The estimated economic life of the system is 10 years and Mitzy's uses straight-line amortization.At the beginning of 20X3,Delicious Bakeries Ltd.acquired Mitzi's in a business combination.At the time of the acquisition,Mitzi's baking system had a fair value of $140,000.With respect to the baking system,how much amortization expense should Delicious Bakeries report on its consolidated financial statements at the end of 20X3?

A) $ 2,500
B) $14,000
C) $15,000
D) $17,500