purchase, the patent was valid for 15 years. On January 1, 2020, Arabian Company purchased a patent for a new consumer product for P900,000. At the time of However, the patent's useful life was estimated to be only 10 years due to the competitive nature of the product. On December 31, 2023, the product was permanently withdrawn from sale under governmental order because of a potential health hazard in the product. Required: 1. Prepare journal entry to record the patent acquisition.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 32-5 (AICPA Adapted)
purchase, the patent was valid for 15 years.
On January 1, 2020, Arabian Company purchased a patent
for a new consumer product for P900,000. At the time of
However, the patent's useful life was estimated to be only 10
rears due to the competitive nature of the product.
On December 31, 2023, the product was permanently
withdrawn from sale under governmental order because of a
potential health hazard in the product.
Required:
1. Prepare journal entry to record the patent acquisition.
2. Prepare journal entry to record the amortization of the
patent for 2023.
3. Prepare journal entry to record the writeoff of the patent
on December 31, 2023.
Transcribed Image Text:Problem 32-5 (AICPA Adapted) purchase, the patent was valid for 15 years. On January 1, 2020, Arabian Company purchased a patent for a new consumer product for P900,000. At the time of However, the patent's useful life was estimated to be only 10 rears due to the competitive nature of the product. On December 31, 2023, the product was permanently withdrawn from sale under governmental order because of a potential health hazard in the product. Required: 1. Prepare journal entry to record the patent acquisition. 2. Prepare journal entry to record the amortization of the patent for 2023. 3. Prepare journal entry to record the writeoff of the patent on December 31, 2023.
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