It can be established that a definite benefit has resulted from good name; capable staff or reputation.
When a patent is amortized, the credit is usually made to An entity had above normal earnings for five years.
An accumulated depreciation account
An expense account Question 5
An accumulated amortization account 1 / 1 pts
The patent account An entity has two patents that have allegedly been infringed by competitors. After investigation, legal
counsel informed the entity that it had a weak case on patent A34 and a strong case in regard to patent
B20. Both patents have a remaining legal life of 8 years..
Question 2 How should the entity account for these legal costs incurred relating to the two patents?
1 / 1 pts
Which among the following is not a characterisctic of an intangible asset? Capitalize costs for A34 and expense costs for B20
Capitalize costs for both A34 and B20
it provides economic benefit Expense costs for both A34 and B20
it may be subject to amortization given the useful life Expense costs for A34 and capitalize costs for B20
it is an identifiable asset
it has physical characteristics
Question 6
1 / 1 pts
Question 3 At year-end, A Company purchased another entity for P8,000,000. The carrying amount of the
1 / 1 pts acquiree’s net assets on the date of acquisition is P6,200,000. An analysis indicated that the fair value
Which of the following intangible assets should not be amortized? of the acquiree’s tangible assets exceeded the carrying amount by P600,000, and the fair value of
identifiable intangible assets exceeded carrying amount by P450,000. What amount of goodwill should
Customer list be recognized by acquirer
Goodwill
All of the intangible asset should be amortized 1,800,000
Copyright 1,200,000
0
750,000
IncorrectQuestion 4
0 / 1 pts
Goodwill shall be recognized only when Question 7
1 / 1 pts
It is acquired through the purchase of another entity. Which of the following would not be considered research and development activity?
It is purchased from another entity.
1 / 1 pts
Laboratory research aimed at discovery of new knowledge. A related patent with a remaining life of 15 years was purchased to enhance the exsiting patent that
Adaptation of an existing capability to a particular requirement or customer need. has a remaining life of 10 years. The related patent extends the life of the existing patent to 15 years.
Conceptual formulation and design of possible product alternative. The original patent should be amortized subsequent to the acquisition of the related patent over a
Application of research finding or other knowledge to a plan for new product. period of
10 yearS
Question 8 25 years
1 / 1 pts 20 years
During 2015, A Company incurred research and development cost of P1,360,000 relating to a patent 15 years
that was granted on July 1, 2015. Cost of registering the patent equalled P340,000. The patent legal life
is 20 years and the estimated economic life is 10 years. On December 31, 2015, what amount should be
reported as patent net accumulated amortization? Question 11
1 / 1 pts
306,000 A Company purchased a patent on January 1, 2010 for P6,000,000. The original life of the patent was
1,615,000 estimated to be 15 years. However, in December 2015, the controller received information providing
1,657,000 conclusively that the product protected by the patent would be obsolete within four years. The entity
323,000 decided to write off the unamortized portion of the patent cost over five years beginning in 2015. What
is the patent amortization for 2015?
IncorrectQuestion 9 1,200,000
0 / 1 pts 400,000
A Company was granted a patent on a product on January 1, 2005 with a 20-year useful life. To protect 800,000
the patent, the entity purchased on January 2015 for P4,500,000 a patent on a competing product 1,000,000
which was originally issued on January 1, 2010. Because of the unique plant, the entity does not feel
the competing patent can be used in producing a product. What is the amortization of the competing
patent for 2015? Question 12
1 / 1 pts
300,000 A purchased patent has a remaining legal life of 15 years. It should be
0
225,000 Amortized over 20 years
450,000 Amortized over 15 years regardless of the useful life.
Expensed in the year of acquisition
. Amortized over its useful life if less than 15 years
Question 10
Amortized over the remaining useful life of the patent.
Question 13 Patent and amortized over the legal life of the patent.
1 / 1 pts Expense of the period.
Start-up costs including legal and state fees to organize a new entity should be Legal fees and amortized over five years.
Expensed as incurred.
Capitalized and never amortized
Capitalized and amortized over a reasonable period.
Capitalized and tested for impairment annually.
Question 14
1 / 1 pts
Goodwill shall be tested for impairment
Annually
If there is an indication of impairment
On the acquisition of subsidiary
Every 5 years
Question 15
1 / 1 pts
Copyright should be amortized over
the useful life or legal life, whichever is shorter
the life of the creator plus fifty years
the legal life
twenty years
Question 16
1 / 1 pts
The cost of successfully defending a patent from infringement by a competitor should be charged to