Reference no: EM132951765
Questions -
Q1. On January 02, 2017, the START-UP COMPANY purchased a patent for a new consumer product for P90,000. At the time of purchase, the patent was valid for 15 years. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. On December 31, 2019, the product was removed from the market under governmental order because of a potential health hazard present in the product. What amount should Orient report as loss from obsolescence during 2019, assuming amortization is recorded at the end of each year?
A. 9,000
B. 72,000
C. 63,000
D. 54,000
Q2. VINCENZO Inc developed a trademark to distinguish its product from those of its competitors. Through advertising and other means, the company is seeking to establish significant product identification to increase future sales. The similarity between the trademark costs and other intangible and operating costs has caused some confusion over property accounting. The following items are being treated as part of the cost of the trademark:
Marketing research to study consumer tastes- 400,000
Design costs of trademark- 1,500,000
Legal fees of registering the trademark- 150,000
Advertising to establish recognition of trademark- 200,000
Registration fee with Patent Office- 50,000
Through renewals, the trademark is expected to have an unlimited life. The cost to be capitalized as trademark should be:
A. 2,100,000
B. 1,900,000
C. 2,300,000
D. 1,700,000
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