On January 1, 2019, the account balances of Acelle Company showed patent cost of P1,920,000 and related accumulated amortization of P240,000. The patent was purchased on January 1, 2017 at which date the remaining legal life was 16 years. On January 1, 2020, the useful life of the patent was determined to be only 8 years from the date of acquisition. On January 1, 2020, Acelle Company paid P800,000, of which three-fourths was for a trademark, and one-fourth was for the other entity's agreement not to compete for a five-year period in the line of business covered by the trademark. Acelle Company considers the life of the trademark indefinite. Moreso, Acelle Company agreed to pay P50,000 to the other entity as consulting fee each year for 5 years payable every January 1. What is the amortization of intangible assets for 2020?

On January 1, 2019, the account balances of Acelle Company showed patent cost of P1,920,000 and related accumulated amortization of P240,000. The patent was purchased on January 1, 2017 at which date the remaining legal life was 16 years. On January 1, 2020, the useful life of the patent was determined to be only 8 years from the date of acquisition. On January 1, 2020, Acelle Company paid P800,000, of which three-fourths was for a trademark, and one-fourth was for the other entity's agreement not to compete for a five-year period in the line of business covered by the trademark. Acelle Company considers the life of the trademark indefinite. Moreso, Acelle Company agreed to pay P50,000 to the other entity as consulting fee each year for 5 years payable every January 1. What is the amortization of intangible assets for 2020?

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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