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 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. The amount of amortization that should be recognized for 2005 is

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 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. The amount of amortization that should be recognized for 2005 is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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_____
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
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 March 2015, Agency A is taking legal action against its competitor for patent infringement relating to a patent that had been granted to the agency on one of its products. The outcome of the case is uncertain. However, it is probable that the court will order the competitor to pay damages to the entity. - State whether a contingent liability or contingent asset exists.- Explain your answers by stating the criteria of your answers below.
Kingbird had one patent recorded on its books as of January 1, 2017. This patent had a book value of $129,600 and a remaining useful life of 6 years. During 2017, Kingbird incurred research and development costs of $203,500 related to this patent and was sued by a competitor to nullify the patent. On September 1, 2017, the Court found that Kingbird's patent was valid and that its competitor could not use the process Kingbird had patented. The company incurred $65,280 to defend this patent. At what amount should patent(s) be reported on the December 31, 2017, balance sheet, assuming monthly amortization of patents? Carrying amount 12/31/17 $
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?
Safehouse Company was granted a patent on a product on January 1, 2011 with a 20-year useful life. To protect the patent, the entity purchased on January 1, 2021 for P4,500,000 a patent on a competing product which was originally 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 compéting patent for 2021? a. 450,000 b. 225,000 C. 300,000 d. 0.
Safehouse Company was granted a patent on a product on January 1, 2010 with a 20-year useful life. To protect the patent, the entity purchased on January 1, 2020 for P4,500,000 a patent on a competing product which was originally issued on January 1, 2015. Because of the unique plant, the entity does not feel the competing patent can be used in producing a product. What is the amortization of the competing patent for 2020?
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?
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.
On January 15, 2018, a corporation was granted a patent on a product. On January 2, 2020, to protect its patent, the corporation purchased a patent on a competing product that originally was issued on January 10, 2016. Because of its unique plant, the corporation does not feel the competing patent can be used in producing a product. The cost of the competing patent should be Amortized over a maximum period of 17 years Amortized over a maximum period of 13 years Amortized over a maximum period of 9 years Expensed in 2020