Direct Assurance Company revised the estimates of the useful life of a trademark it had acquired three years earlier. How should Direct account for the change?
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Direct Assurance Company revised the estimates of the useful life of a trademark it had acquired three years earlier. How should Direct account for the change?
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- On January 1, 2005, Mambusao Company bought a trademark from Panitan Company for P6,000,000. Mambusao retained an independent consultant who estimated the trademark's life to be indefinite. Its carrying amount in Panitan's accounting records was P4,000,000. In Mambusao's December 31, 2005 balance sheet, what amount should be reported as trademark? a. 6,000,000 b. 5,700,000 c. 3,800,000 d. 3,600,000On January 1, 20X0, Vick Company purchased a trademark for $400,000, which had an estimated useful life of 16 years. On January 1, 20X4, Vick paid $60,000 for legal fees in a successful defense of the trademark. Required: How much should Vick record as trademark amortization expense for 20X4On January 1, 2009, Jonalyn Company purchased a patent from an original patentee for P2,400,000. The remaining legal life of the patent is 15 years but the useful life is only 12 years. On January 1, 2010, the entity paid P550,000 in successfully defending the patent in an infringement suit filed against the entity. On January 1, 2011, the entity acquired a competing patent for P1,500,000. The competing patent has a remaining legal life 15 years but it is not to be used because it was intended to protect the original patent. Question: What is the carrying amount of the patent on December 31, 2011?
- A company purchased a patent 4 years ago, and was amortizing thatpatent over a 10-year useful life. In the current year, the companydetermined the patent had become worthless. The write-off of thepatent asset in the current year is an example of which of the followingexpense recognition principles?a. associating cause and effectb. immediate consumptionc. systematic and rational allocationd. objectivityOn October 1, 2014, PHINEAS Acquired the net assets of FERB which resulted to goodwill. When PHINEAS issued its December 31, 2014 financial statements, the valuation of an acquired trademark was incomplete. PHINEAS used $1,000,000 as provisional fair value of trademarks and determined a 5-year amortization life. PHINEAS appropriately disclosed in its December 31, 2014 financial statements that the trademark was measured at a provisional amount. On April 30, 2015, the valuation of the trademark was finalized. The fair value of the acquisition date amounted to $21,200,000. How much is the increase (decrease) of the Goodwill in December 31, 2015?Which of the following statements concerning intangibles is true? a. a copyright should be considered an intangible with an indefinite lifeb. organization costs must be expensed as incurredc. a patent should be amortized over the shorter of the inventor’s life or its economic lifed. the registration of a trademark or tradename lasts for 20 years and is nonrenewable
- On January 1, 2014, Aim Company showed patent of P1,920,000 with related accumulated amortization of P240.000. The patent was purchased on January 1,2012 at which date the legal life is 16 years. On January 1, 2014, the useful life of the patent was determined to be only 8 years from the date of acquisition. On January 1, 2014, in connection with the purchase of a trademark from Cat Company, the parties entered into a noncompetition agreement and a consulting contract. Aim Company paid Cat Company P800,000, of which three-fourths was for the trademark, and one-fourth was for Cat Company's agreement not to compete for a five-year period in the line of business covered by the trademark. Aim Company considered the life of the trademark to be indefinite. Moreover, Aim Company agreed to pay Cat Company P50,000 annually on January 1 of each year for 5 years. What is the total amortization of intangible assets for 2014?On Jan 1, 20X1, ABC Corp purchased a patent for P90,000. At the time of purchase the patent was valid for 15 years, however the patent's useful life was estimated to be only ten years due to the competitive nature of the product. On Dec 31, 20X3, the product was permanently withdrawn from sale in the market due to its potential damage to environment. What amount should ABC charge against revenue at Dec 31, 20X3?Brace Company purchased a patent on January 1, 2015 for P 6,000,000. The original life of the patent was estimated to be 15 years. However on December 31, 2020, the controller received information proving conclusively that the product protected by the patent would be obsolete within four years. The entity decided to write off the unamortized portion of the patent cost over five years beginning 2020. the unamortized portion of the patent on December 31, 2020, before adjustment for amortization in 2020 is: ____________ 2. The entry to record amortization of patent on December 31, 2020:
- 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?On April 1, a patent with an estimated useful economic life of 12 years was acquired for $100,800. In addition, on December 31, it was estimated that goodwill of $55,500 was impaired. a. Record the acquisition of patent. If an amount box does not require an entry, leave it blank. b. Journalize the adjusting entry on December 31 for the amortization of the patent rights. Do not round intermediate calculations. If an amount box does not require an entry, leave it blank. c. Journalize the adjusting entry on December 31 for the impaired goodwill. If an amount box does not require an entry, leave it blank.Trademarks were previously acquired for $200,000 on January 1, 2018. Estimated useful life at the time of acquisition was 20 years. In 2019, there was litigation challenging these trademarks brought by a competitor, and GeneralProducts successfully defended these trademarks at a legal cost of $45,000. The new (updated) useful life of the trademarks was estimated to be 25 years from the date of acquisition. All sales were on credit and totaled $940,560. COGS totaled $780,650. Included in the total sales of $940,560 were the sales of 6,000 soap powder boxes. As a premium offer to increase soap powder sales, GeneralProducts includes one special coupon with every soap powder box. Customers can redeem four coupons to obtain one free premium item—a kitchen utensil. Based on past experience, 60% of the coupons are expected to be redeemed by customers. During 2019, 3,400 coupons were actually redeemed. Also in 2019, GeneralProducts purchased an additional 1,000 premiums (kitchen utensil items)…