Laguna Company acquired three patents in January 2005. The patents have different lives as indicated in the following schedule: Cost Remaining useful life Remaining legal life Patent A 2,000,000 10 8 Patent B 3,000,000 5 10 Patent C 6,000,000 Indefinite 15 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2005, the company successfully defended its right to Patent B. Legal fees of P800,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar- year basis. The amount of amortization that should be recognized for 2005 is

Laguna Company acquired three patents in January 2005. The patents have different lives as indicated in the following schedule: Cost Remaining useful life Remaining legal life Patent A 2,000,000 10 8 Patent B 3,000,000 5 10 Patent C 6,000,000 Indefinite 15 Patent C is believed to be uniquely useful as long as the company retains the right to use it. In June 2005, the company successfully defended its right to Patent B. Legal fees of P800,000 were incurred in this action. The company's policy is to amortize intangible assets by the straight-line method to the nearest half year. The company reports on a calendar- year basis. The amount of amortization that should be recognized for 2005 is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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