試題詳解

8. On January 2, 2019, Lutz Inc. purchased a patent with a cost of CHF1,880,000 and a useful life
of 4 years. At December 31, 2019, and December 3 1, 2020, the company determines that
impairment indicators are present. The following information is available for impairment testing
at each year end:

The company's 2020 income statement will report
(A) Amortization Expense of CHF470,000.
(B) Amortization Expense of CHF470,000 and a Loss on Impairment of CHF50,000.
(C) Amortization Expense of CHF500,000 and Loss on Impairment of CHF 1 10,000.
(D) Loss on impairment of CHF140,000.