Exercise 1-5: J-MARIZ Inc. holds a valuable patent on a precipitator that prevents certain types of air pollution. J-MARIZ does not manufacture or sell the products and process it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns patents to manufactures on a royalty basis. Occasionally it sells patents. The following presents the summary of the activities in relation to the aforementioned patent: 01/01/2012 Research aimed at the discovery of the new technology 01/05/2013 Design and construction of a prototype 03/15/2013 Testing the prototype model 01/02/2014 Legal and other professional fees to process the patent application (useful = legal life) 12/10/2016 Legal fees paid to successfully defending the device patent 01/03/2018 Acquisition of the competitive patent aimed for protecting old patent that shall increase company sales 01/05/2019 Acquisition of the related patent which extended the life of the patents for additional 2 years 12/31/2021 Legal fees paid to unsuccessful patents infringement suit against a competitor Required: answer the following: 1. What is the correct cost of the patent upon initial recognition? 2. What is the carrying value of the patent on December 31, 2014? 3. What is the carrying value of the patent on December 31, 2018? 4. What is the carrying value of the patent on December 31, 2020? 5. What is the total cost from patent write off should be recognized in 2021? P1, 520, 000.00 262, 800.00 126,000.00 186,000.00 107, 100.00 121,800.00 196, 312.50 75,000.00