Reference no: EM132957230

Questions -

Q1. Iceberg Company purchased a patent on January 1, 2013 for P8,000,000. The original useful life was estimated to be 15 years. However, on December 31, 2018, Iceberg's controller received information proving conclusively that the product protected by the patent would be obsolete within four years. Accordingly, the entity decided to write-off the unamortized portion of the patent cost over five years beginning in 2018. What is the patent amortization for 2018?

Q2. Transactions during the current year of the newly organized Corporation included the following:

-Paid legal fees of P60,000 and stock certificate costs of P20,000 to complete organization of the Corporation;

-Hired temporary employee for 2 weeks to hand out pamphlets and candy, P15,450;

-Patented a newly developed process with cost as follows: - Legal fees to obtain the patent, P550,000

-Patent application and licensing fees, P65,000

-It is estimated that in 5 years other companies will have developed improved similar process, making the patent process obsolete. Acquired both license to use a special type of container and a distinctive trademark to be printed on the container in exchange for 6,000 ordinary shares selling at P50 per share. The license is worth twice as much as the trademark, both of which may be used for 4 years.

-Constructed a shed for P355,000 to house prototypes or experimental models to be developed in future research projects. Incurred salaries for an engineer and a chemist involved in product development totaling P200,400 in the current year. How much should be recognized as total initial cost of all the Intangible Assets?