Reference no: EM132932877

Question - On January 1, 2019, WOKE CORP. (a non-VAT registered company) purchased software from LOL CORP. for $100,000 when the exchange rate is P1: $0.0250. A 5% discount is available on the purchase. A 12% VAT was also paid due to the importation. Installation and testing costs amounted to P180,000. Costs of introducing a new product or service amounted to P 50,000 and costs of staff training is P 30,000.

On April 1, 2019, WOKE purchased another intangible asset on a deferred settlement basis with a price of P 300,000.00. The cash price equivalent of the asset is P 250,000.

Legal fees and other professional fees paid amounted to P 50,000 while administration and overhead costs amounted to P40,000.

WOKE traded its intangible asset to YOLO CORP. for another intangible asset on June 30, 2019. The details on such exchange transaction are as follows:

WOKE, Fair value- P350,000

YOLO, Fair value- P400,000

WOKE, carrying value- P400,000

YOLO, carrying value- P250,000

WOKE paid YOLO a cash amount equivalent to the difference in the fair values of the intangible assets.

Required - What is the total cost of intangible assets?

a. 4,730,000

b. 5,136,000

c. 4,680,000

d. 5,186,000