Reference no: EM132956401
Question - Dada Corp. was organized in 2013. Its accounting records include only one account for all intangible assets. The following is a summary of the entries that have been recorded and posted during the years 2013 and 2014:
7/1/13 Franchise expiring on June 30, 2021 P252,000
10/1/13 Advance payment on lease expiring on October 31, 2015 168,000
13/31/13 Net loss for 2013 including incorporation fee, P6,000, and Related legal fees of organizing the business, P30,000 (all Incurred in 2013) 96,000
1/2/14 Acquired patent with a useful life of 10 years 444,000
3/14/14 Cost of developing a secret formula 450,000
4/1/14 Goodwill purchased 1,670,400
7/1/14 Legal fees for successful defense of patent purchase on 1/2 75,900
10/1 Research and development costs on a new project 960,000
REQUIRED -
a. What the unamortized patent cost at December 31, 2014?
b. What the unamortized franchise cost at December 31, 2014?
c. What the amount of prepayments to be reported as of December 31, 2014?
d. What the adjusting entries in December 31, 2014, should include a net debit to the retained earnings account at?
e. As a result of the adjustments at December 31, 2014, the total charges against income of 2014 should be?
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