1.On January 1, 2020, KJ Company bought a trademark from MJ Company for P2,250,000. The entity retained an independent consultant who estimated the trademarks life to be indefinite. The carrying amount of the trademark was P1,125,000 on the books of MJ Company. On December 31, 2020, what is the carrying amount of the trademark?

P2,137,500

P1,500,000

0

P2,250,000

2.The owners of KJ Company are planning to sell business to new interests. The cumulative net earnings for the past five years amounted to P11,000,000 including expropriation gain of P1,000,000. The fair value of net assets of East Company was P15,000,000. The goodwill is determined by capitalizing average net earnings at 10%. What is the amount to be paid for Goodwill? *

P15,000,000

P5,000,000

10,000,000

3.On January 1, 2020, the following transactions occurred for KJ Inc: a. It acquired a trademark of GUESS for P20,000,000. b. It developed a trademark known as KISS and incurred P10,000,000 for the research and development. Note: In the Philippines, the registered trademark has a legal life of 10 years and renewable after its expiration. What is the carrying value of trademark as of December 31, 2020? *

P30,000,000

P20,000,000

P27,000,000

P18,000,000

5.KJ Company bought a franchise from MJ Corporation on January 1, 2018 for P5,100,000. An independent consultant retained by KJ estimated that the remaining useful life of the franchise was 20 years. Its unamortized cost on MJs books at January 1, 2018 was P1,700,000. KJ decided to amortize the franchise over the maximum period allowed. What is the carrying value of the franchise on December 31, 2020? *

4,590,000

4,845,000

4,717,500

4,335,000

6.KJ Corporation incurred P237,600 of research and development costs to develop a product for which a patent was granted on January 2, 2017. Legal fees and other costs associated with registration of the patent totaled P53,040. On January 2, 2020, Blueberry paid P62,400 for legal fees in a successful defense of the patent. The estimated useful life of the patent is equal to its legal life. What amount should KJ record as amortization expense for 2020? *

P2,652

P9,360

P6,250

P23,400