IA Problem 1

Research and Development cost ₱272,000 -referred as Research costs, therefore an EXPENSE

Cost of Registration 68,000

Legal Life 20 years
10 years 3
is SHORTER
whiche

Useful Life
I -
-

Requirement: Determine the CV of Patent to CV be presented in the 2024 FS, assuming the IPO
granted the certificate - of registration on July 1, 2022.

68,000 annual amortization exp

6,800
=

->

10 yrs

for 2021 (u1.1-Dec. 31,

2022)
68,000 16,800 -

x 41) 64,400
=
-> CV

64,600 -

6,880 57,800
=

-> CV for 2023

for 1024
57,800 6,800
=-> CV
-

lite
IA Problem 2 20
amechen it

The following are the costs related to patents of ABC Co.:

1/1/2019 Cost of licensing, registration & other legal fees ₱127,500
-
1/1/2021 Cost of defending patent, ABC won over the case 45,000 -

litigation costs ALUDED

1/1/2022 Payment of acquiring competent patent 255,000

Note: The competing patent has a useful life of 15 years & it is necessary for the protection of
the old patent.

Requirement: Determine the following as of December 31, 2021:

a.) Amortization expense of patent
b.) Cost of Patent A -

200
a) b)
500 543,375 21,375
-

6,375 (annual amor.

-

6,375x3 19,125(2019-2021)
=

new CA
(127,500 -

19,125) 255,000
+
363,375
=
->

343,375/17yrs
-
did not indicate ofold patent,
life
* Since the problem 20
be its legal
life ofzoyrs. 3 H7
=

yrs
-

will
its life Iremaining yes
will be used to
amortize the
competing patent