Reference no: EM132700754

STU Company spent P18,000,000 on a new software package that is to be used only for internal use. The amount was spent after the application development stage. The economic life of the product is expected to be three years. The equipment, on which the new software package is to be used, is being depreciated over five years. TUS Company spent P24,000,000 during the current year developing a new software package. Of this amount, P8,000,000 was spent before it was at the application development stage and the package was only to be used internally. The package was completed during the year and is expected to have a four-year useful life. The entity has a policy of taking a full year amortization in the first year. After the development stage, an amount of P100,000 was spent on training employees to use the program. UST Company incurred the following research and development costs during the current year: Materials used 2,000,000; Equipment 4,000,000; Personnel 2,400,000; Indirect costs 3,000,000. These costs relate to a product that will be marketed next year. It is estimated that these costs will be recouped after two years but the process has not achieved economic viability. The equipment has no alternative future use.

Problem 1: What is the total amortization expense in the current year for the three companies?