Greg Company was granted a patent on January 1, 2017 and appropriately capitalized P 450,000 of related costs. The entity was amortizing the patent over the useful life of 15 years, During 2020, the entity paid P 150,000 in legal costs in successfully defending an attempted infringement of the patent. After the legal action was completed, the entity sold the patent to the plaintiff for P 750,000. The policy is to take no amortization in the year of disposal. The entry to record the sale of patent in 2020:
Greg Company was granted a patent on January 1, 2017 and appropriately capitalized P 450,000 of related costs. The entity was amortizing the patent over the useful life of 15 years, During 2020, the entity paid P 150,000 in legal costs in successfully defending an attempted infringement of the patent. After the legal action was completed, the entity sold the patent to the plaintiff for P 750,000. The policy is to take no amortization in the year of disposal. The entry to record the sale of patent in 2020:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Greg Company was granted a patent on January 1, 2017 and appropriately capitalized P 450,000 of
related costs. The entity was amortizing the patent over the useful life of 15 years,
During 2020, the entity paid P 150,000 in legal costs in successfully defending an attempted
infringement of the patent.
After the legal action was completed, the entity sold the patent to the plaintiff for P 750,000. The policy is
to take no amortization in the year of disposal.
The entry to record the sale of patent in 2020:
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