On January 1, 2009, OLD SCHOOL Company purchased a patent for a new…
Question Answered step-by-step On January 1, 2009, OLD SCHOOL Company purchased a patent for a new… On January 1, 2009, OLD SCHOOL Company purchased a patent for a new consumer product for P900,000. At the time of purchase, the patent was valid for 15 years. However, the useful life was estimated to be only 10 years due the competitive nature of the product. On December 31, 2013, the product was permanently withdrawn from sale under governmental order because of a potential health hazard in the product. What amount should be charged against income during 2013, assuming amortization is recorded at the end of each year? a. 720,000 c. 540,000 b. 630,000 d. 90,000 On July 1, 2014, STRADA Company purchased computer equipment at a cost of P 3,600,000. This equipment was estimated to have a six year life with no residual value and was depreciated by the straight line method. On January 1, 2017, STRADA determined that this equipment could no longer process data efficiently, that its value had been permanently impaired, and that P 700,000 could be recovered over the remaining useful life of the equipment. What carrying amount should STRADA report in its December 31, 2017 statement of financial position for the equipment? a. 1,500,000 c. 500,000 b. 700,000 d. Nil amount FORTUNER Company incurred P 1,600,000 of research and development costs to develop product for which a patent was granted o January 1, 2010. Legal fees and other costs associated with registration of the patent totaled P 300,000. On March 31, 2010, FORTUNER paid P 450,000 for legal fees in a successful defense of the patent. What is the total amount that should be capitalized for the patent through March 31, 2010?a. 750,000 c. 2,050,000 b. 300,000 d. 2,350,000 MONTERO Company purchased SPORT Company for P 8,000,000 cash. SPORT Company had total liabilities of P 3,000,000. MONTERO Company’s assessment of the fair value it obtained when purchased SPORT Company is as follows: Cash P 1,000,000 Inventory 500,000 In-process research and development 5,000,000 Assembled workforce 1,200,000 What is the goodwill arising from the acquisition? a. 4,500,000 c. 500,000 b. 1,500,000 d. 300,000 On January 1, 2010, EVEREST Company bought a trademark from FORD Company for P 3,000,000. EVEREST retained an independent consultant who estimated the trademark’s life to be indefinite. Its carrying amount in FORD’s accounting records was P 1,500,000. In the December 31, 2010 statement of financial position, what amount should be reported as trademark? a. 1,500,000 c. 3,000,000 b. 2,850,000 d. 4,500,000 On January 1, 2013, Alliza Company purchased a patent for P7,140,000. The patent is being amortized over the remaining legal life of 15 years. During 2016, the entity determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. On January 1, 2013, the entity purchased another patent for P900,000. At the time of purchase, the patent was valid for 15 years. However the useful life of the patent was estimated to be only 10 years. On December 31, 2016, the patented product was permanently withdrawn from sale under governmental order because of potential health hazard In the product. What total amount should be charged against income in 2016? a. 1,446,000 c. 1,536,000 b. 1,201,200 d. 816,000 What amount should be reported for patent on December 31, 2016? a. 4,896,000 c. 5,436,000 b. 5,526,000 d. 5,140,000 Jeremiah Company Reported the following information at year end:Franchise 1,000,000Computer software 1,500,000Deferred software 100,000Customer list 500,000 Copyright 700,000Deposit with advertising agency to promote goodwill 400,000Bond sinking find 1,300,000Excess of cost over fair of identifiable net assets of acquired subsidiary 4,000,000Trademark 900,000Research and development cost 2,000,000 What total amount should be reported as intangible assets?11,1000,000 c. 10,600,00011,5000,000 d. 13,100,000 Accounting Business Financial Accounting ACCOUNTING ACC122 Share QuestionEmailCopy link Comments (0)
