1/1 PROBLEM 6-4 The ISLAND CORPORATION has the following patent account acquired throughout the years. No amortization entry has been made ever since: PATENT Patent Legal Date No. Life Particulars Costs Jan. 1. 2015 12 yrs. |Acquisition cost P72,000 July 1, 2016 2 15 yrs. Acquisition cost 108,000 Sept. 1. 2017 3 14 yrs. Acquisition cost(Competitor to Patent 2; not used but acquired for protection) 80.000 Oct. 1, 2018 4 20 yrs. Developed by the company but has never produced any single revenue as of Dec. 31, 2020 96.000 Dec. 31. 2018 5 1 1 yrs. Acquisition cost (commercial life, 8 years) 135,600 Jan. 1, 2019 6 10 yrs. Acquisition cost (2019 revenue, P80,000; 2020 revenue, P100,000; 2021 revenue, P60,000;2022 revenue, negligible) 60.000 April 1, 2020 Cost of the successful defense of Patent 1 30.000 Sept. 1, 2020 5 Cost of the unsuccessful defense of Patent No. 5 24.000 Dec. 1. 2020 Cost of research and developmental expenses with no view of a forthcoming product 36,000 Reminders: 1 . For amortization purposes, use whichever is shorter between the remaining legal and economic lives. 2. For better matching of cost and revenue, use the productive output method instead of the straight-line method. 3. Compute rates to the nearest PI; amortization expense to the nearest PI also. 4. Compute remaining lives in months instead of years. 5. The company uses the fiscal year ending June 30