Reference no: EM132932262

Questions -

Q1. Morgan Corporation incurred P298,350 of research and development cost to develop a product for which a patent was granted on January 2. 2011. Legal fees and other costs associated with registration of the patent totaled P 109,200. On January 2, 2017. Moran Company paid P90,000 for legal fees for the litigation put up against the patent. The patent has a useful life 20 years. The final verdict was known only on July 1, 2017 in favor of Morgan Company. What total amount of expense Morgan Company should report in its 2017 profit or loss related to the patent?

Q2. Pirate Company purchased a patent on January 1, 2011 for P428,400. The patent was being amortized over its remaining legal life of 15 years expiring January 1, 2026. On, January 1, 2014. Pirate determined that the economic benefits of the patent would last longer than 10 years from the date of acquisition. What amount should be reported in the balance sheet as patent, net of accumulated amortization at December 31, 2017?

Q3. Mini Corp. acquires a patent from Maxi Co. in exchange for 2, 500 shares of Mini Corp.'s P5 par value ordinary shares and P85,000 cash. When the patent was initially issued to Maxi Co., Mini Corp.s shares were selling at P7.50 per share. When Mini Corp. acquired the patent, its shares were selling for P9 a share . Mini Corp. should record the patent at what amount?

Q4. On January y 1,2018 , M Company acquired an intangible asset from a foreign company . The invoice price of the intangible was P10,000, subject to a 10% discount if acquired on a cash basis. M Company paid P2,000,000 import duties and professional fees of P100,000 in relation to its acquisition. At what amount should the intangible asset be initially recorded in the books of M Company?