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7. On July 1, 2013 Drake Ltd. purchased a patent from Jackson Inc. for $175,000. At that time the patent had 10 years of its
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Answer #1

Amortization of the patent for year ended March 31, 2014

= Cost of the patent (purchase price) / New estimated useful life

= $175000 / 7 years

= $25000

Therefore, the correct answer is option (d), $25000.

Note - Useful life estimate used by the previous owner is irrelevant if new owner estimates useful life again.

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