Andallo, Ransey Ace D.

BSA 2-13

Intermediate Accounting 2 Assignment #01

Intangible assets

4-1 Amsterdam Enterprises, Inc

a. Special Equipment cost

Recoverable amount after

development of new machine
Special Equipment

Cost of testing prototype

Research Salaries and Fringe

Benefits for engineers and scientist

Research and Development Expense

b. Fees Paid to Philippine Patent Office

Drawings Required by Patent Office

Legal cost of filing patent

Total cost of patent, Jan. 1, 2019

Less: amortization of patent for 2 years

(59,700 / 10 = 5970 x 2)
Patent Carrying Value, Dec 31, 2020

c. Patent Carrying Value, Dec 31, 2020

Remaining estimated useful life, Jan 1, 2021
Amortization Expense for the year 2021

d. Carrying Value of Patent, Jan 2, 2022

Less: Amortization Expense for 2022
Carrying value of Patent, Jan 1, 2022
Remaining Estimated useful life, Jan 2, 2022
Carrying Value of Patent, Dec 31, 2022
4-2 May company
 Patents P 136,500
Cost
License P192,000
Cost (100 x 600 x 2/3) P 40,000
Less accumulated amortization      10,000 PHP 30,000.00
Trademark (40,000/4)
Cost (100 x 600 x 1/3) P 20,000
Less accumulated amortization        5,000 PHP 15,000.00
(20,000/4)
Goodwill (12,000,000 - 9,000,000) PHP 3,000,000.00
Total Intangible Assets PHP 3,181,500.00
4-3 July Company
2012 DR CR
Jan-03 Patents PHP 196,000.00
Cash PHP 196,000.00

Dec-31 Amortization Expense- Patents PHP 19,600.00

Accumulated Depreciation- Patents PHP 19,600.00
(196,000/10)

2013
Dec-31 Amortization Expense- Patents PHP 19,600.00
Accumulated Depreciation- Patents PHP 19,600.00

2014
Jan-01 Legal Fees PHP 28,000.00
Cash PHP 28,000.00

2015
Dec-31 Amortization Expense- Patents PHP 19,600.00
Accumulated Depreciation- Patents PHP 19,600.00

2016
Dec-31 Amortization Expense- Patents PHP 19,600.00
Accumulated Depreciation- Patents PHP 19,600.00

2017
Jan-01 Patents PHP 60,000.00
Cash PHP 60,000.00

Dec-31 Amortization Expense- Patents PHP 15,800.00

Accumulated Depreciation- Patents PHP 15,800.00
(196,000-(19,600x5)= 98,000
((98,000+60,000/10= 15,800)

2018
Dec-31 Amortization Expense- Patents PHP 15,800.00
Accumulated Depreciation- Patents PHP 15,800.00

2019
Dec-31 Amortization Expense- Patents PHP 15,800.00
Accumulated Depreciation- Patents PHP 15,800.00

2020
Jul-01 Amortization Expense- Patents PHP 7,900.00
Accumulated Depreciation- Patents PHP 7,900.00
(15,800 x6/12)

Jul-02 loss from write off of patents PHP 102,700.00

Accumulated Depreciation- Patents PHP 153,300.00
Patents PHP 256,000.00
(196,000 + 60,000 = 256,000)
(98,000+ (15,800 x 3.5) =153,300)
(256,000 - 153,300 = 102,700)

4-4 Togo Company

Trademark Carrying Value PHP 4,000,000.00
Recoverable amount
(150,000/10%)x80% PHP 1,200,000.00
(300,000/10%)x20% PHP 600,000.00 -PHP 1,800,000.00
Impairment Loss PHP 2,200,000.00

4-5 Boston Company

a. Patent right cast PHP 500,000.00
Estimated Useful life, July 1, 2017 ÷ 5years
Amortization Expense for 1 year PHP 100,000.00
Estimated Useful life consumed x 0.5 years
Amortization expense fot 2017 PHP 50,000.00

b. Carrying Value of Patent, Jan 1, 2018 PHP 450,000.00

Amortization expense, Dece 31, 2018 -PHP 100,000.00
Carrying value of patent, Dec 31, 2018 PHP 350,000.00
Recoverable Amount of Patent -PHP 150,000.00
Impairment Loss, Dec 31, 2018 PHP 200,000.00

c. Value of Patent Written down, Dec 31, 201PHP 150,000.00

Amortization Expense for 2019
(150,000/3) -PHP 50,000.00
Patent Carrying Value, Dec 31, 2019 PHP 100,000.00

d. Sound value at Jan 1, 2021 PHP 600,000.00

Carrying amount, Dec 31, 2019 -PHP 100,000.00
Increase in value of patent PHP 500,000.00
Impairment loss PHP 200,000.00
Recovery of previous impairment loss
through lowest amortization (100k - 50k) -PHP 50,000.00 PHP 150,000.00
Revaluation surplus, 2020 PHP 350,000.00

4-6 Summer Company

2017 Research and Development PHP 500,000.00

Cash PHP 500,000.00
2018
Jan-01 Patents PHP 120,000.00
 Cash PHP 120,000.00

Dec-31 Amortization Expense-Patents PHP 12,000.00

Accumulated Amortization- Patents PHP 12,000.00
(120,000/10)
2019
Jan-02 Patents ###
Cash PHP 1,200,000.00

Dec-31 Amortization Expense-Patents PHP 87,200.00

Accumulated Amortization- Patents PHP 87,200.00
((120,000-12,000)+120,000)/15)
2020
Dec-31 Amortization Expense-Patents PHP 87,200.00
Accumulated Amortization- Patents PHP 87,200.00

Dec-31 Loss from write off of patents ###

Accumulated Amortization- Patents PHP 186,400.00
Patents PHP 1,320,000.00
(120,000+1,200,000)
(12,000 +( 87,200 x 2)
(1,320,000 - 186,400)

4-7 April Company

Laboratory research for discovery of new knowledge 68,000
Modification of formulation 26,000
Testing for evaluation of new products 24,000
Searching for application of new research findings 19,000
Depreciation of equipment (280,000/5 years) 56,000
Research and Development Costs for 2019 PHP 193,000

4-8 Autumn Company

Dr Cr
a.
2019 Franchise ###
Cash PHP 6,250,000.00

Dec-31 Franchise Fee Expense PHP 500,000.00

Cash/ Accrued Expenses PHP 500,000.00
(10,000,000 x 5%)

Dec-31 Amortization Expense - Franchise PHP 312,500.00

Accumulated Amortization- Franchise PHP 312,500.00
(6,250,000/10)0.5)

b.

2019 Amortization Expense- Patent PHP 142,500.00

Accumulated Amortization- Patent PHP 142,500.00
(8,750,000/10)9.5years)/5years)
 c.
2019 Research and Development Expense ###
Equipment ###
Accumulated Depreciation- Equipment PHP 100,000.00
Cash PHP 3,100,000.00
(200,000 + 1,400,000 + 600,000)
((1,000,000/5) 4.5)

4-9 Global Computer Corporation

a.
2019 Software Costs PHP 800,000.00
Research and Development Costs PHP 500,000.00
Cash PHP 1,300,000.00
(500,000 + 300,000)
(100,000 + 400,000)

b.
2019 Amortization Expense - Software Costs PHP 125,000.00
Accumulated Amortization- Software costs PHP 125,000.00
(500,000/ 4 = 125,000)
(500,000(1,000,000/5,000,000) = 100,000)

4-10 Sun Company

a. Down Payment for franchise PHP 500,000.00

Future Payments- Present Value
300,000 x 2.4869 PHP 746,070.00
Total Franchise Cost, 2019 ###

b. Franchise Cost, 2019 ###

Estimated Useful Life ÷ 10years
Amortization Expense- Franchise, 2019 PHP 124,607.00

c.
2019 Franchise ###
Discounts on Notes Payable PHP 153,930.00
Cash PHP 500,000.00
Notes Payable PHP 900,000.00

Dec-31 Interest Expense PHP 74,607.00

Discount on notes payable PHP 74,607.00
(746,070x 10%)

Dec-31 Amortization Expense- Franchise PHP 124,607.00

Accumulated Amortization- Franchise PHP 124,607.00

2017
Jan-01 Notes Payabke PHP 300,000.00
Cash PHP 300,000.00

4-11 Winter Company

 a. Cash Purchase Price PHP 7,000,000.00
Fair Value of Net asset
Trade Receivables ###
Inventory ###
PPE ###
Total Liabilities ### -PHP 6,240,000.00
Good Will PHP 760,000.00

b. Trade Receivables ###

Inventory ###
Property, Plant and Equipment ###
Goodwill PHP 760,000.00
Current Liabilities PHP 760,000.00
Non- Current liabilities PHP 1,600,000.00
Cash PHP 7,000,000.00

4-12 Bagong Silangan Company

a. Carrying Value of cash generating units and goodwill ###
(400,000 + 5,000,000 + 6,200,000 + 1,000,000 + 800,000)
Less: Recoverable amount of cash-generating units ###
Impairment loss PHP 300,000.00

Impairment loss PHP 300,000.00

Goodwill PHP 300,000.00

b. Carrying Value of cash generating units and goodwill ###

Less: Recoverable amount of cash-generating units ###
Impairment loss PHP 1,000,000.00
Credited to goodwill -PHP 400,000.00
Decrease in value of identifiable non-current assets PHP 600,000.00

Impairment loss ###

Goodwill PHP 400,000.00
Accumulated Depreciation- Building PHP 286,154.00
Accumulated Depreciation- Patents PHP 46,154.00
Accumulated Depreciation - Trademarks PHP 36,923.00
Land PHP 230,769.00

(6,200,000/ 13,000,000 x 600,000)

(1,000,000/ 13,000,000 x 600,000)
(800,000/ 13,000,000 x 600,000)
(5,000,000/ 13,000,000 x 600,000)
PHP 600,000.00

-PHP 460,000.00
PHP 140,000.00

PHP 70,800.00
PHP 51,300.00

PHP 262,100.00

PHP 7,500.00
PHP 14,100.00

PHP 38,100.00
PHP 59,700.00

-PHP 11,940.00
PHP 47,760.00

PHP 47,760.00
÷ 8years
PHP 5,970.00

PHP 41,790.00

PHP 41,790.00
÷ 5 PHP 8,358.00
PHP 33,432.00