Question

West Co. paid $50,000 for an intangible asset other than goodwill. Fair value of the asset is $55,000. West signed a contract to sell the asset for $10,000 in 10 years. What amount of amortization expense should West record each year?

Answer 1

$4,000

Step-by-step explanation:

Intangible assets are usually amortized using the straight line depreciation method.

Depreciation expense = ( Cost - Salvage value) / number of years

= ($50,000 - $10,000)/ 10 = $4000

I hope my answer helps you.