On January 1, 2018, Laica Company purchased a patent from an original patentee for P2,400,000. The remaining life of the patent is 15 years but the useful life is only 12 years. On January 1, 2019, the entity paid P550,000 in successfully defending the patent in an infringement suit filed against the entity. On January 1, 2020, an entity acquired a competing patent for P1,500,000. The competing patent has a remaining life of 15 years but it is not used because it was intended to protect the original patent. Assume that the company is an SME. What is the carrying amount of the patent on December 31, 2020?
On January 1, 2018, Laica Company purchased a patent from an original patentee for P2,400,000. The remaining life of the patent is 15 years but the useful life is only 12 years. On January 1, 2019, the entity paid P550,000 in successfully defending the patent in an infringement suit filed against the entity. On January 1, 2020, an entity acquired a competing patent for P1,500,000. The competing patent has a remaining life of 15 years but it is not used because it was intended to protect the original patent. Assume that the company is an SME. What is the carrying amount of the patent on December 31, 2020?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 5RE: Mystic Pizza Company purchased a patent from Prime Pizza Plus on January 1, 2019, for 72,000. The...
Related questions
Question
On January 1, 2018, Laica Company purchased a patent from an original patentee for P2,400,000. The
remaining life of the patent is 15 years but the useful life is only 12 years. On January 1, 2019, the
entity paid P550,000 in successfully defending the patent in an infringement suit filed against the
entity. On January 1, 2020, an entity acquired a competing patent for P1,500,000. The competing
patent has a remaining life of 15 years but it is not used because it was intended to protect the original
patent.
Assume that the company is an SME. What is the carrying amount
of the patent on December 31, 2020?
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
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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT