Laguna Company acquired three patents in January 2005. The patents have different lives as indicated in the following schedule: Cost Remaining useful life Remaining legal life Patent A 2,000,000 10 8 Patent B 3,000,000 5 10 Patent C 6,000,000 Indefinite 15 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2005, the company successfully defended its right to Patent B. Legal fees of P800,000 were incurred in this action. The companys policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. The amount of amortization that should be recognized for 2005 is A. 1,330,000 B. 1,250,000 C. 2,050,000 D. 950,000

Laguna Company acquired three patents in January 2005. The patents have different lives as indicated in the following schedule: Cost Remaining useful life Remaining legal life Patent A 2,000,000 10 8 Patent B 3,000,000 5 10 Patent C 6,000,000 Indefinite 15 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2005, the company successfully defended its right to Patent B. Legal fees of P800,000 were incurred in this action. The companys policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar-year basis. The amount of amortization that should be recognized for 2005 is A. 1,330,000 B. 1,250,000 C. 2,050,000 D. 950,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 75P

See similar textbooks

Similar questions

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: How much is amortization expense recorded on 12/31/17?___________ How much is the amount of write-down of patent B?_____________ Carrying value of patent A?___________ 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_____
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 5 7 Patent C656,200 Indefinite 17 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: How much is amortization expense recorded on 12/31/17?___________ How much is the amount of write-down of patent B?_____________ Carrying value of patent A?___________
On 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?
Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to Group of answer choices 1) patents and amortized over the legal life of the patent. 2) legal fees and amortized over 5 years or less. 3) expenses of the period. 4) patents and amortized over the remaining useful life of the patent.
Corporation was granted a patent on a product on January 1, 2004. To protect its patent. the corporation purchased on January 1, 2015 a patent on a competing product which was originally issued on January 10, 2011. The cost of the competing patent should be: a. amortized over a maximum period of 20 years. b. amortized over a maximum period of 16 years. c. amortized over a maximum period of 9 years. d. expensed in 2015 Explain each choices. Why is it not the answer or why it is the answer.
The Garnet Trading spent P1,440,000 in acquiring a patent on January 3, 2011. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. beginning of 2015, the company paid P180,000 for legal fees in a successful defense of the patent. On July 1, 2019, a competitor obtained rights to a patent which made Garnet's patent obsolete. How much is the loss from the patent obsolescence? The correct answer is a. 216,000 Please give me a solution to this answer.
Crystal Company summarized the following transactions pertaining to its patent. 2012 Spent P250, 000 for the research and development of the patent 2013 Jan. 1 Paid P60, 000 to apply for and obtain right to the patent. The useful life of the patent is 10 years. 2014 Jan. 1 Purchased for P600, 000 a new patent that is expected to prolong the life of the original patent by 6 years. 2015 Dec. 31 A competitor obtained rights to a patent which rendered the entity’s patent obsolete Required: Prepare all entries relating to the patent from 2012 to 2015. rules of answering the problem
Running Running Corporation incurred P298,350 of research and development cost to develop a product for which a patent was granted on January 2, 2016 and legal fees and other costs associated with registration of the patent totaled P195,000. On January 1, 2022, Running Running paid P90,000 legal fees for the litigation put up against the patent. The patent has a useful life of 12 years. Assume that Corporation failed in their attempt to defend the patent in their litigation proceedings, what total amount of expense should Running Running Corporation report in its 2022 profit or loss related to the patent?
1. Safehouse Company was granted a patent on a product on January 1, 2011 with 20 -year useful life. To protect the patent, the entity purchased on January 1, 2021 for P4,500,000 a patent on competiting product which was originaly issued on January 1, 2016. Because of the unique plant, the entity does not feel the competing patent can be used in producing a product. What amount should be recorded as amortization of the competing patent for 2021? 2. Gray Company was granted a patent on January 1, 2018 and appropriately capitalized P450,000 of related costs. The entity was amortizing the patent over the useful life of 15 years. During 2021, the entity paid P150,000 in legal costs in successfully defending an attempted infringement of the patent. After the legal action was completed, the entity sold the patent to the plaintiff for P750,000. The policy is to take no amortization in the year of disposal. What amount should be reported as gain from sale of patent in 2021?
Oriole Company incurred $930000 of research and development costs in its laboratory to develop a new product. It spent $174000 in legal fees for a patent granted on January 2, 2022. On July 31, 2022, Oriole paid $82000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2022?
On January 3, 2012, the July Company spent P196,000 to apply for and obtain a patent on a newly developed product. The patent had an estimated useful life of 10 years. At the beginning of 2014, the company spent P28,000 in successfully prosecuting an attempted infringement of the patent.. At the beginning of 2017, the company purchased for P60,000 a patent that was expected to prolong the life of its original patent by 5 years. On July 1, 2020, a competitor obtained rights to a patent that made the company's patent obsolete. REQUIRED: Prepare journal entries to record the transactions relative to the patents from January 3, 2012 to July 1, 2020, inclusive.