Alliyah Co. was granted a patent on January 1, 20x1. The patent was appropriately recognized at P 800,000 and estimated to have a useful life of 10 years. In 20x3, Alliyah Co. incurred P 100,000 in successfully defending the patent in an infringement suit. However, two months after the suit, the company sold the intangible asset to the plaintiff for P 600,000. It is the company’s policy to recognize the full year’s amortization in the year of acquisition and none in the year of derecognition. How much is the gain(loss) on disposal recognized in the company’s 20x3 statement of profit or loss?
Alliyah Co. was granted a patent on January 1, 20x1. The patent was appropriately recognized at P 800,000 and estimated to have a useful life of 10 years. In 20x3, Alliyah Co. incurred P 100,000 in successfully defending the patent in an infringement suit. However, two months after the suit, the company sold the intangible asset to the plaintiff for P 600,000. It is the company’s policy to recognize the full year’s amortization in the year of acquisition and none in the year of derecognition. How much is the gain(loss) on disposal recognized in the company’s 20x3 statement of profit or loss?
Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges
Section: Chapter Questions
Problem 85P
Related questions
Question
- Alliyah Co. was granted a patent on January 1, 20x1. The patent was appropriately recognized at P 800,000 and estimated to have a useful life of 10 years. In 20x3, Alliyah Co. incurred P 100,000 in successfully defending the patent in an infringement suit. However, two months after the suit, the company sold the intangible asset to the plaintiff for P 600,000. It is the company’s policy to recognize the full year’s amortization in the year of acquisition and none in the year of derecognition. How much is the gain(loss) on disposal recognized in the company’s 20x3 statement of profit or loss?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT