In early January 2020, HUMID Corporation applied for a trade name, incurring legal costs ofP160,000. Based on new market research, HUMID determines that the market value of the tradename is P120,000. In January 2021, HUMID incurred P7,800 of legal fees in a successful defenseof its trade name. Trade name should be amortized based on legal life.What is the cost of Tradename?P120,000P160,000P280,000O P167,800

Trademark shall be measured at costs that are directly associated with its registration. In other…

Answered: In early January 2020, HUMID…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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11
On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at P800,000, 5 years ago. The carrying value of the equipment is P500,000. There is no established selling price for the equipment. Upon executing the sale, ABC received P100,000 down payment and a 12% promissory note which gives the holder the right to collect 150,000 annually starting December 200A until December 200C, when the interest rate prevailing in the market is 13%. At the end of December 200A, the carrying value of the noncurrent portion of note receivable is
In January 2021, Blossom Corporation purchased a patent for a new consumer product for $558900. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. In 2026 the product was determined to be obsolete due to a competitor's new product. What amount should Blossom report on the income statement during 2026 related to the patent, assuming straight-line amortization is recorded at the company's December 31 year-end? $35890 O $279450 O $578900 O $179450
During 2023, Lowry Company was used by a competitor for P5,000,000 infringement suit of a trademark. Based on the legal counsel's advice, Lowery accrued the sum of P3,000,000 as a provision. On February 15, 2024, the Supreme Court decided in favor of the party alleging the infringement and ordered the defendant to pay the aggrieved party a sum of P3,500,000. The financial statements of Lowry were approved by the BOD for issue on February 20, 2024. What amount should the Company accrue as provision for the year ended December 31, 2023? O 5,000,000 O 3,000,000 O 3,500,000
The airport land rights were given to XYZ Airlines on June. 30, 2021. On that date, the rights were valued at P15,000,000. The agreement gives the entity 30 years over those rights. The entity incurred equipment rearrangement costs as result of these rights. As of Dec. 31, 2021, the fair value of the rights significantly declined to P7,000,000 but XYZ sees an acceptable level of profits in the upcoming years. If the asset was recorded at fair value, how much is the carrying value of the airport land rights as of December 31, 2021?
Raya corporation spent $150,000 developing a new process before achieving economic viability, $40,000 in legal fees to obtain a patent, and $40,000 to market the process that was patented, all in the year 2019. How should these costs be accounted for in 2019? The patent will be reported at $150,000, the $80,000 should be expensed Patent will be reported at $230,000 The patent will be reported at $40,000, the $190,000 should be expensed The patent will be reported at $190,000, the $40,000 should be expensed
Cayman Corp. incurred $ 140,000 of basic research and $ 35,000 of development costs to develop a product for which a patent was granted on January 2, 2015. Legal fees and other costs associated with registration of the patent totalled $ 50,000. On March 31, 2020, Cayman paid $ 75,000 for legal fees in a successful defence of the patent. The total amount capitalized for the patent through March 31, 2020 should be $ 265,000. $ 160,000.
Novaklimited has a trademark with a carrying amount of $84,000, and expected useful life of 15 years. As part on December 31, 2020, due to a change in customer tastes, Novak gathered the following data about the trademark for the purposes of an impairment test: fair value $44,400: fair value less costs to sell $41.100; value in use $95,700; and undiscounted future cash flows $129,000. Assume that Novak is reporting under IFRS. Determine if the trademark is impaired on December 31, 2020. Trademark is
In May 2019, Colt Company filed suit against Johnson Company seeking P1,900,000 damages for patent infringement. A court verdict in November 2019 awarded Colt Company P1,500,000 in damages, but Johnson Company's appeal is not expected to be decided before 2020. The legal counsel believed it is probable that Colt Company will be successful against Johnson Company for an estimated amount in the range between P800,000 and P1,100,000, with P1,000,000 considered the most likely amount. What amount should Colt Company record as income from the lawsuit for the December 31, 2019? year ended
Show the solution in good accounting form
During 2020, Lomi, Co.filed suit against Ocean, Inc seeking damages for patent infringement. At December 31, 2020. Lomi’s legal counsel believed that it was probable that Lomi would be successful against Ocean for an estimated amount of P 1,500,000. In March 2021, Lomi was awarded P 1,000,000 and received in full payment thereof. In Lomi’s 2020 financial statements issued February 2021, how should this award be reported? a. As a receivable and revenue of P 1,500,000b. As a receivable and revenue of P 1,000,000c. As a disclosure of a contingent asset of P 1,500,000d. As a disclosure of a contingent asset of P 1,000,000
Larkspur Limited purchased a patent for $86,400 on June 1, 2022. Larkspur has a calendar fiscal year end. Straight-line amortization is used for the patent, based on a five-year useful life, although the remaining legal life was 10 years. On May 31, 2024, Larkspur paid $28,800 in legal fees to successfully defend this patent in court and now wants to revise the estimate of the patent's remaining useful life to 8 years, which is the same as its remaining legal life. (a) (b) (c) (d) Record any necessary amortization prior to the change in the useful life of the patent. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List debit entry before credit entry)

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