PROBLEM 5 MNO Company acquired a patent on January 1, 2023 for P510,000. It is expected that the patents are useful for 10 years from the date of acquisition. Legal life however, was 20 years. On January 1, 2024, the company spent P76,500 to successfully defend against a competitor. During 2025, the management determined that the estimated useful life of the patent should be reduced to only 5 years, including the current year. The policy of the company was to amortize the cost of the intangible assets using the straight-line method to nearest full month. 5. How much is the carrying value of the patents on December 31, 2024?

PROBLEM 5 MNO Company acquired a patent on January 1, 2023 for P510,000. It is expected that the patents are useful for 10 years from the date of acquisition. Legal life however, was 20 years. On January 1, 2024, the company spent P76,500 to successfully defend against a competitor. During 2025, the management determined that the estimated useful life of the patent should be reduced to only 5 years, including the current year. The policy of the company was to amortize the cost of the intangible assets using the straight-line method to nearest full month. 5. How much is the carrying value of the patents on December 31, 2024?

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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