In January 2013, Vega Corporation Purchased a Patent at a Cost

Multiple Choice

In January 2013, Vega Corporation purchased a patent at a cost of $200,000. Legal and filing fees of $50,000 were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In 2016, Vega spent $40,000 in legal fees for an unsuccessful defense of the patent. The amount charged to income (expense and loss) in 2016 related to the patent should be:

A) $40,000.
B) $65,000.
C) $215,000.
D) $25,000.