Need help with this accounting question Peck Tech purchased a trademark on 1 July 2017 for $240 000.Economic benefits were expected for 8 years, but the trademark'slegal life was 15 years. Also, during 2017/18, Peck's incurred researchand development costs of $150,000. The carrying amount of thetrademarks on 30 June 2018, is:a. $300,000b. $210,000c. $262,500d. $360,000

Step 1: Define TrademarksTrademarks are intangible assets of a business, which means they are not in…

Answered: Peck Tech purchased a trademark on 1…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 7MC

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On December 31, 2020, Zari Company acquired the following intangible assets:• A trademark for P3,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without problem. ,• A patent for P2,000,000. Because of market conditions, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years.Because of a decline in the economy, the trademark is now expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 in 2022, P600,000 in 2023, P400,000 in 2024 and P500,000 in 2025. The appropriate discount rate for all intangible assets is 6%. The present value of 1 at 6% for one period is 0.94, for two periods is 0.89, for three periods is…

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