Freetown Manufacturing company acquired three patents in January 2016. The patents have different lives as indicated in the following schedule. Cost Useful Life Legal Life Patent A 125,000 10 17 Patent B272,500 57 Patent C656,200Indefinite17 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2017, the company unsuccessfully attempted to defend its right to Patent B. Legal fees of P127,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. Required: 4. Carrying value of patent C?___________ 5. rules in answering the problem_____
Freetown Manufacturing company acquired three patents in January 2016. The patents have different lives as indicated in the following schedule.
Cost Useful Life Legal Life
Patent A 125,000 10 17
Patent B272,500 57
Patent C656,200Indefinite17
Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2017, the company unsuccessfully attempted to defend its right to Patent B. Legal fees of P127,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis.
Required:
4. Carrying value of patent C?___________
5. rules in answering the problem_____
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