Paranich Co

Multiple Choice

Paranich Co.acquired Crowley Co.in a business combination at December 31,20X4.Crowley has a capital asset that it has been amortizing at a rate of $10,000 per year.At the time of the acquisition,the asset had a book value of $70,000 and a fair value of $77,000.The asset has a remaining life of 7 years.With respect to this asset,how much amortization expense should Paranich report on its December 31,20X5 consolidated financial statements?

A) $ 1,000
B) $ 7,700
C) $10,000
D) $11,000