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Homework answers / question archive / Smitty Museum purchased the copyright to a piece of artwork for $922,000
Smitty Museum purchased the copyright to a piece of artwork for $922,000. Smitty plans to reproduce 1.8 million posters of the artwork over a period of 12 years. Calculate the amortization for the year assuming the Museum plans to reproduce and sell 130,000 posters the first year.
a. $78,633
b. $76,833
c. $66,589
d. $74,125
e. $0, copyrights are not amortized.
Answer:
b . $ 76,833
Step-by-Step explanation
Amortization per year for the copyright will be calculated using the following formula -
(Cost of an asset - Salvage value) / Life of an asset
= $922,000 / 12
= $76,833 per year.
