26. ABC Corporation has provided information on intangible assets as follows: A patent was purchased from Sinigang Company for P6,000,000 on January 1, 20X1. On the acquisition date, the patent was estimated to have a useful life of 10 years, The patent had a net book value of P6,000,000 when XYZ sold it to ABC. • On February 1, 20X2, a franchise was purchased from Franchisor Company for P1,440,000. The contract which runs for 20 years provides that 5% of revenue from the franchise must be paid to Franchisor. Revenue from the franchise for 20X2 was P7,500,000. • The following research and development costs were incurred by ABC in 20X2: Materials and equipment 426,000 Personnel 567,000 Indirect costs 306,000 Because of recent events, ABC, on January 1, 20X2, estimates that the remaining useful life of the patent purchased on January 1, 20X1 is only 5 years from January 1, 20X2. On December 31, 20X2, the carrying value of the patent should be?
26. ABC Corporation has provided information on intangible assets as follows:
A patent was purchased from Sinigang Company for P6,000,000 on January 1, 20X1. On the acquisition date, the patent was estimated to have a useful life of 10 years, The patent had a net book value of P6,000,000 when XYZ sold it to ABC.
• On February 1, 20X2, a franchise was purchased from Franchisor Company for P1,440,000. The contract which runs for 20 years provides that 5% of revenue from the franchise must be paid to Franchisor. Revenue from the franchise for 20X2 was P7,500,000.
• The following research and development costs were incurred by ABC in 20X2:
Materials and equipment 426,000
Personnel 567,000
Indirect costs 306,000
Because of recent events, ABC, on January 1, 20X2, estimates that the remaining useful life of the patent purchased on January 1, 20X1 is only 5 years from January 1, 20X2. On December 31, 20X2, the carrying value of the patent should be?
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