16.W COMPANY purchased factory equipment which was installed and put into service on July 1, 2020 at a total cost of P6,400,000. Residual value was estimated at P400,000. The equipment is being depreciated over eight years by double declining balance method.

What is the depreciation of the equipment for 2021?

Group of answer choices

A. 1,200,000

B. 1,400,000

C. 1,600,000

D. 1,125,000

18.If the intangible asset is acquired by way of exchange of assets and the transaction lacks commercial substance, the intangible asset shall be measured initially at

Group of answer choices

A. Carrying amount of the asset given

B. Fair value of the asset received

C. Carrying amount of the asset received

D. Fair value of the asset given

19.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. Capitalized for P1 and Expensed for P2

B. Expensed for P1 and capitalized for P2

C. Capitalized for both P1 and P2

D. Expensed for both P1 and P2

20.Choose the incorrect statement.

Group of answer choices

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

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

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

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

21.Which is incorrect concerning separate acquisition of an intangible asset?

Group of answer choices

A. If an intangible asset is acquired in exchange for a nonmonetary asset or a combination monetary and nonmonetary asset, the cost is measured at fair value unless the exchange transaction lacks commercial substance.

B. The cost of an intangible asset comprises its purchase price and any directly attributable expenditure on preparing the asset for its intended use.

C. If an intangible asset is acquired separately, the cost of the intangible asset can usually be measured reliably.

D. If payment for an intangible asset is deferred beyond normal credit terms, its cost is equal to the total payments over the credit period.

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

Group of answer choices

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

B. Amount paid to the franchisor for the franchise

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

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

24.On January 1, 2020, DEF COMPANY purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to its original condition with present value of P1,800,000. The property can be sold afterwards for P3,000,000 (residual value). During 2020, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production (intangible). The entity removed 80,000 tons of ore and sold 60,000 tons of ore in Year 1. What amount of depletion should be included incost of salesfor 2020?

Group of answer choices

A. 1,500,000

B. 1,590,000

C. 1,440,000

D. 1,920,000

25.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

Group of answer choices

A. P3,036,000.

B. P2,748,000.

C. P1,832,000.

D. P2,024,000.

26.Mini Corp. acquires a patent from Maxi Co. in exchange for 2,500 shares of Mini Corp.'s P5 par value common stockandP90,000 cash.

• When the patent was initially issued to Maxi Co., Mini Corp.'s stock was selling at P7.50 per share.
• When Mini Corp. acquired the patent, its stock was selling for P9 a share. Mini Corp.

How much is the patent at the acquisition date?

Group of answer choices

A. P108,750

B. P90,000

C. P112,500

D. P102,500

27.Gemo Company purchases a trademark from an overseas company to manufacture items under the trademark. Gemo incurs the following costs in purchasing the trademark:

Amount paid for the trademark, P8,000,000;

Import duties, P80,000;

Legal fees (negotiating the deal and ensuring the term of the trademark are fair), P100,000;

Training costs (required by overseas company), P20,000;

Advertising new product, P30,000

Cost of registering the trademark (required in terms of the agreement with supplier), P90,000.

What amount should the trademark be initially recorded?

Group of answer choices

A. 8,290,000

B. 8,180,000

C. 8,320,000

D. 8,270,000

28.JDE Co. acquires 3 patents from Shaq Corp. for a total of P300,000.

The patents were carried on Shaq's books as follows: Patent AA: P5,000; Patent BB: P2,000; and Patent CC: P3,000.

When JDE acquired the patents theirfair valueswere: Patent AA: P20,000; Patent BB: P240,000; and Patent CC: P60,000.

At what amount should JDE record Patent AA?

Group of answer choices

A. P18,750

B. P56,250

C. P150,000

D. P225,000

29.Jepoy Corporation purchased a limited-life intangible asset for P150,000 on January 1, 2020. It has a useful life of 10 years. What total amount of amortization expense (accumulated amortization) should have been recorded on the intangible asset by December 31, 2022?

Group of answer choices

A. Zero

B. 45,000

C. 40,000

D. 30,000

30.HumpyDumpy Company purchased a patent on January 1, 2020 for P428,400. The patent has economic benefit that would not last longer than 10 years from the date of acquisition. Legal life of the patent is 20 years. What is the carrying value of the Patent on December 31,2024?

Group of answer choices

A. 299,880

B. 321,300

C. 257,040

D. 214,200