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Problem 1: Which type of asset is amortization used for?
A. Natural resources
B. Current assets
C. Tangible assets
D. Intangible assets
On January 1 of Year 1, a company purchased a trademark for $70,000. The trademark is expected to have a 10-year economic useful life. The trademark is assumed to have zero salvage value at the end of its economic useful life. The company uses straight-line amortization.
Problem 2: What is needed in the journal entry to record amortization expense on this trademark at the end of Year 1?
A. Credit to trademark for $7,000
B. Credit to trademark for $70,000
C. Credit to amortization expense for $7,000
D. Credit to amortization expense for $70,000
Financial Statement Analysis and Preparation
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