单选题
At the beginning of 2007, Bryan' s Bakery Company purchased a secret
cookie recipe for $ 25000. In addition, Bryan developed a new cake recipe at a
cost of $ 5000. Bryan expects to use both recipes indefinitely ; however, the
useful (economic) life of similar recipes has been 10 years. Assuming
straight-line amortization, what amount of recipe expense should Bryan report
for the year ended 2007 and what amount should Bryan report as a tangible asset
on its balance sheet at the end of 2007?
Recipe expense Balance sheet
①A. $ 7500
$ 22500
②B. $ 3000
$ 27500
③C.
$ 7500 $ 0
【正确答案】
C
【答案解析】The recipes are intangible assets. The purchased cookie recipe is capitalized and amortized over 10 years at $ 2500 per year( $ 25000 cost/10 years). Since the cake recipe was developed internally, it is expensed immediately. Thus, total expense for 2007 is $ 7500( $ 2500 amortization expense + $ 5000 cake recipe expense).