E 1 1 4 ( LO 1 , 2 , 4 ) ( Intangible Amortization ) The following is selected information for Alatorre Company 1 Alatorre purchased a patent from Vania Co for ( $ 1 , 0 0 0 , 0 0 0 ) on January 1 , 2 0 2 3 The patent is being amortized over its remaining legal life of 1 0 years, expiring on January 1 , 2 0 3 3 During 2 0 2 5 , Alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition What amount should be reported in the balance sheet the patent, net of accumulated amortization, at December 3 1 , 2 0 2 5 2 Alatorre bought a franchise from Alexander Co on January 1 , 2 0 2 4 , for $ 4 0 0 , 0 0 0 The carrying amount of the franchise on Alexander's books on January 1 , 2 0 2 4 , was ( $ 4 0 0 , 0 0 0 ) The franchise agreement had an estimated useful life of 3 0 years Because Alatorre must enter a competitive bidding at the end of 2 0 2 6 , it is unlikely that the franchise will be retained beyon 2 0 3 3 What amount should be amortized for the year ended December 3 1 , 2 0 2 5 3 On January 1 , 2 0 2 5 , Alatorre incurred organization costs of ( $ 2 7 5 , 0 0 0 ) What amount of organization expense should be reported in 2 0 2 5 4 Alatorre purchased the license for distribution of a popular consumer product on January 1 , 2 0 2 5 , for $ 1 5 0 , 0 0 0 It is expected that this product will generate cash flows for an indefinite period of time The license has an initial term of 5 years but by paying a nominal fee, Alatorre can renew the license indefinitely for successive 5 year terms What amount should be amortized for the year ended December 3 1 , 2 0 2 5 Instructions Answer the questions asked about each of the factual situations

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E 1 1   4 ( LO 1 , 2 , 4 ) ( Intangible Amortization ) The following is selected information for Alatorre Company  1   Alatorre purchased a patent from Vania Co   for   (   $ 1 , 0 0 0 , 0 0 0   ) on January 1 , 2 0 2 3   The patent is being amortized over its remaining legal life of 1 0 years, expiring on January 1 , 2 0 3 3   During 2 0 2 5 , Alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition  What amount should be reported in the balance sheet the patent, net of accumulated amortization, at December 3 1 , 2 0 2 5   2   Alatorre bought a franchise from Alexander Co   on January 1 , 2 0 2 4 , for   $ 4 0 0 , 0 0 0   The carrying amount of the franchise on Alexander's books on January 1 , 2 0 2 4 , was   (   $ 4 0 0 , 0 0 0   )   The franchise agreement had an estimated useful life of 3 0 years  Because Alatorre must enter a competitive bidding at the end of 2 0 2 6 , it is unlikely that the franchise will be retained beyon 2 0 3 3   What amount should be amortized for the year ended December 3 1 , 2 0 2 5   3   On January 1 , 2 0 2 5 , Alatorre incurred organization costs of   (   $ 2 7 5 , 0 0 0   )   What amount of organization expense should be reported in 2 0 2 5   4   Alatorre purchased the license for distribution of a popular consumer product on January 1 , 2 0 2 5 , for   $ 1 5 0 , 0 0 0   It is expected that this product will generate cash flows for an indefinite period of time  The license has an initial term of 5 years but by paying a nominal fee, Alatorre can renew the license indefinitely for successive 5   year terms  What amount should be amortized for the year ended December 3 1 , 2 0 2 5   Instructions Answer the questions asked about each of the factual situations

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Question: E 1 1 . 4 ( LO 1 , 2 , 4 ) ( Intangible Amortization ) The following is selected information for Alatorre Company.

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