As the recently appointed auditor for SUPERB COMPANY, appointed auditor for SUPERB COMPANY, you have been asked to examine selected accounts. Your audit client, organized in 2018, has setup a single account for all intangible assets. The following summary shows the debit entries that have been recorded during 2019. Jan 2 Purchased Patent (8-year life) 870.000 Apr 5 Goodwill 720,000 June 30 Payment of 12 months' rent on PPE leased by the company 182,000 July 1 Purchase franchise with 10-year life; expires on July 1, 2029 900.000 Aug 3 Payment for copyright (5-year life) 312,000 Sept 1 Research and development costs related to the patent incurred before economic viability 320.000During 2018, the following were acquired/paid for by Visionaries Company Trademarks and Certification Marks, P120,000 Cable television license and franchise, P95,000 FVN operating system (for a computer-controlled machine), P65,000 Music copyrights, P70,000 Training cost of employees for a specialized product line, P80,000 Covenants not to compete, P60,000The following costs were incurred by HEART COMPANY during 2019: Searching for applications of new research findings 57,000 Trouble shooting in connection with breakdowns during commercial production 87.000 Adaptation of an existing capability to a particular requirement or customers' 39,000 need as a part of continuing commercial activity Engineering follows through in an early phase of commercial production 45.000 Radical modification of the formulation of a glassware product 78,000 Laboratory research aimed at discovery of new knowledge 204,000 Testing for evaluation of new products 72,000 Quality control during commercial production including routine testing of 174,000 products Materials consumed in research and development costs 177,000 Consulting fees paid to outsiders for research and development projects 300,000 Personnel costs of persons involved in research and projects 384,000 Indirect costs reasonable allocable to research and development projects 150.000 Materials purchased for future research and development 102,000 Research and development costs reimbursable under a contract to perform 1,050,000 research and development for client corporation Design, construction, and testing of preproduction prototypes and models 870.000 Routine on-going effects to refine, enrich, or otherwise improve upon the 750,000 qualities of an existing productAmong the account balance of Jeffrey Corporation at December 31, 2009 are the following: Patent P2,450,000 Installment contract receivable P7,200,000 Relevant transactions and other information for 2010 were as follows: The patent was purchased from Inventor Company for P3,150,000 on September 1, 2006. On that date, the remaining legal life was fifteen years, which was also determined to be the useful life. b. The installment contract receivable represents the balance of the consideration received from the sale of a factory building to Feebie Company on March 31, 2008, for P12,000,000. Feebie made a P3,000,000 down payment and signed a five-year 13% note for the P9,000,000 balance. The first of equal annual principal payments of P1,800,000 was received on March 31, 2009 together with interest to that date. The note is collateralized by the factory building with a fair value of P10,000,000 at December 31, 2010. The 2010 payment was received on time. C. On January 2, 2010, Jeffrey purchased a trademark from Cool Corporation for P2,500,000. Jeffrey considers the life of the trademark to be indefinite. d. On May 1, 2010, Jeffrey sold the patent to Simple Company in exchange for a P5,000,000 non- interest-bearing note due on May 1, 2013. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at May 1, 2010 was at 14%. The present value of 1 for three periods at 14% is 0.675. The collection of the note receivable from Simple is reasonably assured. C. On July 1, 2010, Jeffrey paid P18,800,000 for P750,000 ordinary shares of Pure Corporation, which represented a 25% investment in Pure. The fair value of all of Pure's identifiable assets net of liabilities equals their carrying amount of P64,000,000. The market price of Pure's ordinary share on December 31, 2010 was P26,000 per share. f. Pure reported the profit and paid dividends of: Profit Dividends per share Six months ended, 6/30/10 P5,760,000 None Six months ended, 12/31/10 P7,040,000 P2