PLEASE ANSWER ASAP Problem No. 8 AACA Corp. is in the process of preparing its financial statements for the year ended Dec. 31, 2022. The following represent various information about the entity’s intangible assets. On May 1, 2022, AACA sold a patent in exchange for a P5,000,000 non-interest bearing note due on May 1, 2025. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at May 1, 2022 was 14%. The collection of the note receivable is reasonably assured. The patent was purchased for P3,150,000 on Sept. 1, 2018. On that date, the remaining legal life was fifteen years, which was also determined to be the useful life. In 2022, AACA developed a new machine and secured a patent for it. The following expenses were incurred in developing and patenting the machine: Research and development laboratory expenses P1,500,000 Metal used in the construction of the machine 480,000 Blueprints used to design the machine 192,000 Legal expenses to obtain patent 720,000 Wages paid for the employees’ work on the research, development, and building of the machine (60% of the time was spent in actually building the machine) 1,800,000 Expense of drawing required by the patent office to be submitted with the patent application 102,000 Fees paid to the government patent office to process application 150,000 During 2022, AACA paid P225,000 in legal fees to successfully defend the patent against an infringement suit. In 2022, AACA purchased a trademark and incurred the following costs in connection with the trademark: One-time trademark purchase price P100,000 Nonrefundable taxes 5,000 Training sales personnel on the use of the new trademark 7,000 Research expenditures associated with the purchase of the new trademark 24,000 Legal costs incurred to register the trademark 10,500 Salaries of the administrative personnel 12,000 Based on the given information and the result of your audit, answer the following (Round off present value factors to four decimal places and final answer to the nearest peso): How much is the gain on sale of patent? How much is the cost of the patent on the machine? How much is the cost of the patented machine?

PLEASE ANSWER ASAP Problem No. 8 AACA Corp. is in the process of preparing its financial statements for the year ended Dec. 31, 2022. The following represent various information about the entity’s intangible assets. On May 1, 2022, AACA sold a patent in exchange for a P5,000,000 non-interest bearing note due on May 1, 2025. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at May 1, 2022 was 14%. The collection of the note receivable is reasonably assured. The patent was purchased for P3,150,000 on Sept. 1, 2018. On that date, the remaining legal life was fifteen years, which was also determined to be the useful life. In 2022, AACA developed a new machine and secured a patent for it. The following expenses were incurred in developing and patenting the machine: Research and development laboratory expenses P1,500,000 Metal used in the construction of the machine 480,000 Blueprints used to design the machine 192,000 Legal expenses to obtain patent 720,000 Wages paid for the employees’ work on the research, development, and building of the machine (60% of the time was spent in actually building the machine) 1,800,000 Expense of drawing required by the patent office to be submitted with the patent application 102,000 Fees paid to the government patent office to process application 150,000 During 2022, AACA paid P225,000 in legal fees to successfully defend the patent against an infringement suit. In 2022, AACA purchased a trademark and incurred the following costs in connection with the trademark: One-time trademark purchase price P100,000 Nonrefundable taxes 5,000 Training sales personnel on the use of the new trademark 7,000 Research expenditures associated with the purchase of the new trademark 24,000 Legal costs incurred to register the trademark 10,500 Salaries of the administrative personnel 12,000 Based on the given information and the result of your audit, answer the following (Round off present value factors to four decimal places and final answer to the nearest peso): How much is the gain on sale of patent? How much is the cost of the patent on the machine? How much is the cost of the patented machine?

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 3P

See similar textbooks

Related questions

Question

100%

PLEASE ANSWER ASAP

Problem No. 8

AACA Corp. is in the process of preparing its financial statements for the year ended Dec. 31, 2022.

The following represent various information about the entity’s intangible assets.

On May 1, 2022, AACA sold a patent in exchange for a P5,000,000 non-interest bearing note due on May 1, 2025. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at May 1, 2022 was 14%. The collection of the note receivable is reasonably assured. The patent was purchased for P3,150,000 on Sept. 1, 2018. On that date, the remaining legal life was fifteen years, which was also determined to be the useful life.
In 2022, AACA developed a new machine and secured a patent for it. The following expenses were incurred in developing and patenting the machine:

	Research and development laboratory expenses	P1,500,000
	Metal used in the construction of the machine	480,000
	Blueprints used to design the machine	192,000
	Legal expenses to obtain patent	720,000
	Wages paid for the employees’ work on the research, development, and building of the machine (60% of the time was spent in actually building the machine)	1,800,000
	Expense of drawing required by the patent office to be submitted with the patent application	102,000
	Fees paid to the government patent office to process application	150,000

During 2022, AACA paid P225,000 in legal fees to successfully defend the patent against an infringement suit.

In 2022, AACA purchased a trademark and incurred the following costs in connection with the trademark:

	One-time trademark purchase price	P100,000
	Nonrefundable taxes	5,000
	Training sales personnel on the use of the new trademark	7,000
	Research expenditures associated with the purchase of the new trademark	24,000
	Legal costs incurred to register the trademark	10,500
	Salaries of the administrative personnel	12,000

Based on the given information and the result of your audit, answer the following (Round off present value factors to four decimal places and final answer to the nearest peso):

How much is the gain on sale of patent?
How much is the cost of the patent on the machine?
How much is the cost of the patented machine?
How much is the cost of trademark?

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

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.