16.JB Company purchased a depreciable asset for P450,000. The estimated salvage value is P30,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?

A.P78,750

B.P52,500

C.P112,500

D.P84,375

19.Defined by IAS38 as the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use.

Group of answer choices

A.Research

B.Process improvement

C.Research and development

D.Development

20.Examples of directly attributable costs that are capitalized as cost of intangible assets least likely include

A.Costs of employee benefits (as defined in IAS19) arising directly from bringing the asset to its working condition

B.Professional fees arising directly from bringing the asset to its working condition

C.Costs of testing whether the asset is functioning properly.

D.Costs of conducting business in a new location or with a new class of customers

21.Choose the incorrect statement. Group of answer choices

A.Costs incurred during research phase and development phase are capitalized to intangible asset

B.Internally generated goodwill shall not be recognized as an intangible asset.

C.Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance should be not be recognized as intangible assets.

D.The cost of internally generated intangible asset comprises all directly attributable cost necessary to create, produce and prepare the asset for its intended use.

22.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 P1 and a strong case regard to patent P2. Patent P1 was unsuccessfully defended while patent P2 was successfully defended. Both patents have a remaining legal life of 8 years. How should the entity account for these legal costs incurred relating to the two patent?

Group of answer choices

A.Expensed for P1 and capitalized for P2

B.Capitalized for P1 and Expensed for P2

C.Expensed for both P1 and P2

D.Capitalized for both P1 and P2

23.Which of the following should be expensed as incurred by the franchisee for a franchise with an estimated useful life of ten years?

A.Legal fees paid to the franchisee's lawyers to obtain the franchise.

B.Payment to a company, other than the franchisor, to obtain the franchise

C.Periodic payments to the franchisor based on the franchisee's revenue.

D.Amount paid to the franchisor for the franchise

24.In March 2020, Miley Mines Co. purchased a coal mine for P8,000,000. Removable coal is estimated at 1,500,000 tons. Miley is required to restore the land at an estimated cost of P960,000, and the land should have a value of P840,000(residual value). The company incurred P2,000,000 of development costs preparing the mine for production(intangible cost). During 2020, 450,000 tons were removed and 300,000 tons were sold. The total amount of depletion that Miley should record for 2020 is

A.P2,024,000.

B.P2,748,000.

C.P1,832,000.

D.P3,036,000.

26.Mentos has the following transaction in 2020.

Franchise:On January 1, 2020 - Mentos paid Grand Company P500,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Mentos is in business.

Patent:Mentos spent P600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. In January 1 2020, Mentos' application for a patent was granted. Legal and registration costs incurred were P150,000. The patent runs for 20 years. The manufacturing process will be useful to Mentos for 10 years.

On the same year, Mentos incurred P120,000 in successfully defending one of its patents in an infringement suit.

Research and development work:Mentos paid Sniper Laboratories P104,000 for research and development work performed by Sniper under contract for Mentos. The benefits are expected to last six years.

How much is initially recognized as Intangible Assets?

A.P1354,000

B.P1250,000

C.P1204,000

D.P1474,000

28.The general ledger of Valerio Corporation as of December 31, 2020, includes the following accounts:

Copyrights P30,000

Deposits with advertising agency (will be used to promote goodwill) 27,000

Discount on bonds payable 70,000

Goodwill (from business combination)467,000Trademarks 90,000

In the preparation of Valerio's balance sheet as of December 31, 2020, what should be reported as total intangible assets?

A.P587,000

B.P557,000.

C.P530,000.

D.P560,000.

29.Mentos has the following transaction in 2020.

Franchise:On January 1, 2020 - Mentos paid Grand Company P500,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Mentos is in business.

Patent:Mentos spent P600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. In January 1 2020, Mentos' application for a patent was granted. Legal and registration costs incurred were P150,000. The patent runs for 20 years. The manufacturing process will be useful to Mentos for 10 years.

On the same year, Mentos incurred P120,000 in successfully defending one of its patents in an infringement suit.

Research and development work:Mentos paid Sniper Laboratories P104,000 for research and development work performed by Sniper under contract for Mentos. The benefits are expected to last six years.

How much should be recognized as Amortization Expense during 2020?

A.P92,333

B.P87,000

C.P75,000

D.P104,333