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 companys 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 A. 1,330,000 B. 1,250,000 C. 2,050,000 D. 950,000
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 companys 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
A. 1,330,000
B. 1,250,000
C. 2,050,000
D. 950,000
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