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What will be the carrying values of Patent X

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Question - On January 1, 2018, Navy Company purchased Patent X from the inventor at a price of P180,000. Patent X has a remaining life of 12 years. On the same date, the government granted to Navy Company Patent Y for which was incurred licensing and other related legal fees in securing the patent rights for P340,000 to be amortized using its legal life.

On January 1, 2022, the company successfully defended Patent X at a cost for legal services of P24,000. No cost of legal action was recovered. On December 31, 2027, the company incurred P28,000 for legal services in a successful infringement suit for Patent Y against a competitor. No recovery of legal costs.

Required -

a) Entries to record the purchase of Patent X and granting of Patent Y on January 2, 2018.

b) Entry to record the amortization of the two patents on December 31, 2018.

c) Entry to record on January 1, 2022 for the payment of the cost for legal services for successfully defending Patent X.

d) Entry to record the amortization of the two patents on December 31, 2022.

e) Entry to record on December 31, 2027 for the successful infringement suit for Patent Y against a competitor.

f) Entry to record the amortization of the two patents on December 31, 2028.

g) What will be the carrying values of Patent X and Patent Y on December 31, 2028?

Reference no: EM132595246

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