What amount should albion recognize as an impairment loss

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Question 1: On January 2, 2014, Albion Corp. purchased a patent for a new consumer product for $45,000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. During 2017, the product was permanently removed from the market because of a potential health hazard. What amount should Albion recognize as an impairment loss for calendar 2017, assuming amortization has been recorded annually using the straight- line method with no residual value?

Option 1: $4,500

Option 2: $27,000

Option 3: $31,500

Option 4: $36,000

Reference no: EM132498310

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