Reference no: EM133172654
Questions -
Q1. During 2022, Mowgli Company incurred the following costs: R&D services performed by Elijah Company for Mowgli: P1,500,000
R&D costs incurred by Mowgli Company for Elisha Company and reimbursable by Elisha Company: 2,400,000
Cost incurred in the conceptual formulation of possible process alternative: 2,000,000
Building cost that will be used as R & D facility, acquired on January 1, 2015, with estimated useful life of 10 years: 3,000,000
Design of tools, jigs and molds: 1,300,000
Cost of testing prototype, and design modifications: 900,000
In its 2022 profit or loss, what should Mowgli Company report as research and development expense?
a. P4,700,000
b. P6,000,000
c. P8,700,000
d. P11,100,000
Q2. On January 1, 2019, Frankfurt Company purchased a patent for P714,000. The patent is being amortized over its remaining life of 8 years expiring on January 1, 2027. During 2022, Frankfurt determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition.
What amount should be reported in the statement of financial position for the patent, net of accumulated amortization at December 31, 2022?
a. P271,875
b. P297,500
c. P238,000
d. P148,750
Q3. Bahrain Company acquired a trademark for P10 million from Bangkok Trading on January 2, 2022. The trademark is carried in the accounting records for Bangkok at an amortized cost of P7.6 million. Bahrain's independent consultant has estimated that the remaining useful life of the trademark is 10 years.
What amount should Bahrain report as accumulated amortization in its December 31, 2022 statement of financial position?
a. P380,000
b. P500,000
c. P760,000
d. P1,000,000