What is the patent carrying value on january

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Reference no: EM132700765

Shafran Food Products, a manufacturer of chocolate drinks, acquired a patent on June 28, 2018 for P340,000. Management expects the patents to be useful to the company for its remaining life of 10 years. Legal life of the patent is 20 years. On January 3, 2019, the company spent P51,000 to successfully defend the patent against a competitor. During 2020, management determines that the estimated remaining life of the patent should be reduced to only five years, including the current year. This was made after a very careful consideration of the situation the company is in, more so with respect to its competitors. The company policy is to amortize the cost of intangible assets using the straight-line method to the nearest full month.

Question 1: How much is the patent amortization expense for 2018?

Question 2: What is the patent carrying value on January 1, 2020?

Question 3: How much is the revised amortization in 2021?

Reference no: EM132700765

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