ABC Company acquired a patent right on July 1, 2019 for P500,000. The asset has a legal life of 15 years but due to the rapidly changing technology, management estimated a useful life of only five years. On December 31, 2020, management is uncertain that the process can actually be made economicallt feasible and decides to write down the patent to its recoverable amount of P150,000. Amortization will taken over three years from that time. a. Determine tge amortization expense for the year 2019. b. Determine the impairment loss recognized in 2020. c. Determine the Patent carrying value at December 31, 2021.
ABC Company acquired a patent right on July 1, 2019 for P500,000. The asset has a legal life of 15 years but due to the rapidly changing technology, management estimated a useful life of only five years. On December 31, 2020, management is uncertain that the process can actually be made economicallt feasible and decides to write down the patent to its recoverable amount of P150,000. Amortization will taken over three years from that time. a. Determine tge amortization expense for the year 2019. b. Determine the impairment loss recognized in 2020. c. Determine the Patent carrying value at December 31, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ABC Company acquired a patent right on July 1, 2019 for P500,000. The asset has a legal life of 15 years but due to the rapidly changing technology, management estimated a useful life of only five years.
On December 31, 2020, management is uncertain that the process can actually be made economicallt feasible and decides to write down the patent to its recoverable amount of P150,000. Amortization will taken over three years from that time.
a. Determine tge amortization expense for the year 2019.
b. Determine the impairment loss recognized in 2020.
c. Determine the Patent carrying value at December 31, 2021.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education