Xenon Tech acquired a patent on January 1st, 2018, for $26,400. The patent was estimated to have a useful life of 12 years. On July 1st, 2022, the company incurred legal fees of $6,000 to successfully defend the patent in an infringement suit. How much amortization expense will Xenon Tech recognize on the Income Statement for the year ended December 31st, 2022

$2200 is the amortization cost that appeared in the year December 31, 2022.

Explanation:

The first thing is that the legal cost incurred to defend the patent in an infringement suit doesnot qualifies for capitalization as it is not required for upgrading the asset. So the only amount relevant here is Initial cost of $26,400.

Amortization cost = $26,400 / 12 years life = $2200 per year

The additional legal cost of $6,000 will appear in the income statement separately.

answer; the above statement is (true);

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