On January 3, 2015, the Pomelo Company spent P480,000 to apply for and obtain a patent on a newly developed product. The patent had an estimated useful life of 10 years. During 2017, the company spent P90,000 in successfully prosecuting an attempted infringement of the patent. In the first week of 2020, the company incurred additional costs of P200, 000 relevant to the patent. It is expected that future economic benefits will flow to the enterprise as a result of this expenditure through cost savings and the asset’s use is estimated to be extended by additional 5 years. How much is the patent amortization for the year 2020?
On January 3, 2015, the Pomelo Company spent P480,000 to apply for and obtain a patent on a newly developed product. The patent had an estimated useful life of 10 years. During 2017, the company spent P90,000 in successfully prosecuting an attempted infringement of the patent. In the first week of 2020, the company incurred additional costs of P200, 000 relevant to the patent. It is expected that future economic benefits will flow to the enterprise as a result of this expenditure through cost savings and the asset’s use is estimated to be extended by additional 5 years. How much is the patent amortization for the year 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 3, 2015, the Pomelo Company spent P480,000 to apply for and obtain a patent on a newly developed product. The patent had an estimated useful life of 10 years. During 2017, the company spent P90,000 in successfully prosecuting an attempted infringement of the patent. In the first week of 2020, the company incurred additional costs of P200, 000 relevant to the patent. It is expected that future economic benefits will flow to the enterprise as a result of this expenditure through cost savings and the asset’s use is estimated to be extended by additional 5 years. How much is the patent amortization for the year 2020?
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