Tweedie Company reported the following in the long-term asset section of its balance sheet. They did not purchase or sell any equipment during the period. Dec. 31, Year 2 Dec. 31, Year 1 Equipment, net of depreciation of $120,000 and 100,000, respectively $167,500 $187,500 Patent, net of amortization of $31,500 and $27,000, respectively 88,000 92,500 The company uses the straight-line method to depreciate and amortize all of its operating assets. How much depreciation expense did Tweedie record in Year 2

Tweedie Company

The total Depreciation Expense that Tweedie recorded in Year 2 is $20,000.

The total Amortization Expense that Tweedie recorded in Year 2 is $4,500.

Explanation:

a) Data and Calculations:

                                       Dec. 31, Year 2      Dec. 31, Year 1   Depreciation

                                                                                                    Expense

Equipment, net                  $167,500                   $187,500     $20,000

Patent, net                             88,000                     92,500           4,500

Equipment depreciation  $120,000                 $ 100,000     $20,000

Patent amortization            $31,500                    $27,000         4,500

b) Note that the depreciation and amortization expenses can be computed from the net balances or from the depreciation and amortization expenses for the two years respectively.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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