Reference no: EM132939360

Questions -

Q1. Corona Company purchased a patent for P284,375 on January 2, 2015. The patent was being amortized over its remaining legal life of fifteen years expiring on January 2, 2030. Early on January 2, 2018, Corona determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. What amount should be charged to patent amortization expense for the year ended December 31, 2018?

Q2. Quer Company purchased two machines for P250,000 each on January 2, 2020. The machines were put into use immediately. Machine A has a useful life of five years and can only be used on one research project. Machine B will be used for two years on a research and development project and then used by the production division for an additional eight years. Quer uses straight-line method of depreciation. What amount should Quer include in 2020 research and development expense?

Q3. Colgate Co. bought a trademark from Crest Corp. on May 1, 2019 for P300,000. Its unamortized cost on Crest's accounting records was P112,000. Colgate decided to amortize the trademark over its legal life from the date of purchase. In Colgate's December 31, 2019, Financial Position what amount should the trademark be reported?

Q4. On January 2, 2020, Maelet Co. purchased a franchise with a useful life of ten years for P600,000. An additional franchise fee of 5% of franchise operation revenues must be paid each year the franchisor. Revenues from franchise operations amounted to P3,000,000 during 2020. In its December 31, 2020, Statement of Financial Position, what amount should Maelet report as an intangible asset-franchise?

Q5. Lucky Mae Company incurred research and development costs in 2020 as follows: Equipment acquired for various researches and development projects P1,400,000; Depreciation on the above equipment P140,000; Materials used P136,000; Compensation cost for personnel P450,000; Outside consulting fees P87,000; Indirect costs appropriately allocated P120,000. What is the total research and development cost charged in Lucky Mae's Income Statement?

Q6. On June 30, 2020, Happee Inc. purchased goodwill of P125,000 when it acquired the net assets of Beam Corp. During 2020, Happee incurred additional cost of developing the goodwill, by training Beam employees (P50,000) and hiring additional Beam employees (P25,000). How much should Happee report as goodwill on its December 31, 2020 Financial Position?