At December 31, 2020, Green company had three existing patents shown below: Date Acquired Cost Useful life Patent A February 14, 2016 P 150,000 8 years Patent B January 3, 2019 210,250 10 years Patent C July 1, 2019 72,000 5 years During 2021, the company had the following transactions and assessments: Due to the emerging competition relating to the product being manufactured in Patent A, it is expected that the right will be useful only in 2021 and 2022. Patent B is believe to be uniquely useful as long as the company retains the right to use it. On June 1, 2021, the company unsuccessfully attempted to defend its right to Patent C. Legal fees of P15,000 was incurred in this action. The asset was immediately derecognized in the accounts. The company’s policy is to take full year amortization in the year of acquisition and no amortization in the year of derecognition using straight-line method. How much is the amortization of patent for the year 2021?

Note 1: Compute the amortization to be recorded for Patent A for 2021 as follows: - Note 2:…

Answered: On June 1, 2021, the company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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At December 31, 2020, Green company had three existing patents shown below:

	Date Acquired	Cost	Useful life
Patent A	February 14, 2016	P 150,000	8 years
Patent B	January 3, 2019	210,250	10 years
Patent C	July 1, 2019	72,000	5 years

During 2021, the company had the following transactions and assessments:

Due to the emerging competition relating to the product being manufactured in Patent A, it is expected that the right will be useful only in 2021 and 2022.

Patent B is believe to be uniquely useful as long as the company retains the right to use it.

On June 1, 2021, the company unsuccessfully attempted to defend its right to Patent C. Legal fees of P15,000 was incurred in this action. The asset was immediately derecognized in the accounts.

The company’s policy is to take full year amortization in the year of acquisition and no amortization in the year of derecognition using straight-line method.

How much is the amortization of patent for the year 2021?

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