Hello there! The questions are all about intangible assets and R&D costs. Kindly explain the solutions on how you get the answer. There are no missing graphics, data or other informations. Thank you.

1.At the beginning of current year, Clein Company signed a contract where the entity was to pay P4,000,000 cash plus P600,000 per month rent for an office building. The contract is for 10 years and renewable for another 10 years at a monthly rental of P800,000. Prior to occupancy, the lessee spent P1,600,000 in improving the building, In addition, the parking lot was improved, new pavements were made at a cost of P400,000. It is estimated that such improvement will be usable for 5 years. What is the carrying amount of the leasehold improvement at the end of the current year?

2.At the beginning of the current year, Capucon Company rented office space in a choice downtown location for 5 years. The annual rent is P2,400,000 payable at the beginning of each year starting in the current year. In order to obtain the lease, the company paid P400,000. The company made substantial alterations to the interior of the building, moved certain walls and added windows. The alterations which cost P800,000 are expected to have a useful life of 10 years. In addition, carpet, light fixtures and partitions costing P200,000 were added. The latter alterations have an economic life of 4 years and residual value of P8,000. What is the carrying amount of the leasehold improvement at the end of the current year?

3.Webber Company purchased a patent on January 1, 2014 for P12,000,000. The original life of the patent was estimated to be 15 years. However, in December 2019, the controller received information proving conclusively that the product protected by the patent would be obsolete within four years. The entity decided to write off the unamortized portion of the patent cost over five years beginning in 2019. What is the patent amortization for 2019?

4.Schiff Company was granted a patent on a product on January 1, 2009 with a 20-year useful life. To protect the patent, the entity purchased on January 1, 2019 for P9,000,000 a patent on a competing product which was originally issued on January 1, 2014. Because of the unique plant, the entity does not feel the competing patent can be used in producing a product. What is the amortization of the competing patent for 2019?

5.Natalia Company was granted a patent on January 1, 2016 and appropriately capitalized P900,000 of related costs. The entity was amortizing the patent over the useful life of 15 years. During 2019, the entity paid P300,000 legal costs in successfully defending an attempted infringement of the patent. After the legal action was completed, the entity sold the patent to the Gutman for P1,500,000. The policy is to take no amortization in the year of disposal. What amount should be reported as gain from sale of patent in 2019?

6.Gregor Company acquired a patent for a drug with a remaining legal and useful life of six years on January 1, 2017 for P10,800,000. The entity used straight line amortization. On January 1, 2019, a new patent is received for an improved version of the same drug. The new patent has a legal and useful life of twenty years. What is the amount of amortization expense for 2019?

7.On January 1, 2018, Popper Company purchased a patent with a cost of P11,600,000 and useful life of five years. The entity used straight line amortization. On December 31, 2019, the entity determined that impairment indicators are present. The fair value less cost of disposal of the patent is estimated to be P5,400,000. The value in use is estimated to be P5,650,000. The remaining useful life of the patent is estimated to be two years. What amount should be reported as impairment loss for 2019?

8.During 2019, Suggia Company incurred research and development cost of P2,720,000 relating to a patent that was granted on July 1, 2019. Cost of registering the patent equaled P680,000. The patent legal is life is 20 years and the estimated economic life is 10 years. On December 31, 2019, what amount should be reported as patent net accumulated amortization?

9.Sheku Company developed a trademark to distinguish its products from those of the competitors. Through advertising and other means, the entity is seeking to established significant product identification to increase future sales. The similarity between trademark costs and other intangible and operating costs has caused some confusion over proper accounting. The trademark has a remaining legal life of eight years and can be renewed automatically. The following items are being treated as part of the cost of the trademark: Marketing research to study consumer tastes 800,000; Design costs of trademark 3,000,000; Legal fees of registering trademark 300,000; Advertising to establish recognition of trademark 400,000; Registration fee with Patent Office 100,000. In the same year, Kanneh Company acquired a registered trademark for P1,200,000,000. The trademark has a remaining legal life of five years but can be renewed every 10 years for a nominal fee. The entity expects to renew the trademark indefinitely. Which statement is correct?

a. The carrying amount of Sheku Company's Trademark at the end of 5 years is P1,275,000.

b. The carrying amount of Kanneh Company's Trademark at the end of 5 years is 0.

c. The accumulated amortization of Sheku Company's Trademark at the end of the 3rd year is P637,500.

d. At the end of second year, the carrying amount of Sheku Company's Trademark is P2,200,000 higher than the carrying amount of Kanneh Company's Trademark

e. None of the statements is correct.

10.On January 1, 2019, Servais Company acquired the following intangible assets: *A P4,000,000 trademark which has a remaining legal life of 8 years the trademark will be renewed in the future indefinitely without a problem. *A P6,000,000 patent which has an economic life of 5 years. On December 31, 2019, the intangible assets are tested for impairment. The trademark is now expected to generate cash flows of P240,000 per year. The cash flows expected to be generated by the patent amount to P2,000,000 annually for each of the next 4 years. The appropriate discount rate for all intangible assets is 8%. What is the total impairment loss?

11.At the beginning of the current year, Dmitri Company acquired an intangible asset for P6,000,000. The intangible asset has an estimated useful life of 10 years. At the current year-end, the intangible asset was evaluated to determine whether it was impaired. On the same date, the fair value less cost of disposal of the intangible asset is P4,000,000.The asset is expected to generate future cash flows of P300,000 annually for the remaining 9 years. The appropriate discount rate is 5%. What is the impairment loss to be recognized for the current year?

12.Toscanini Company acquired copyright to the original recordings of a famous singer. The agreement with the singer allows the entity to record and rerecord the singer for a period of 5 years. During the initial six-month period of the agreement, the singer is very sick and consequently cannot record. The studio time that was blocked by the entity had to be paid during the period the singer could not sing. The following costs are incurred by the entity: Cost of acquiring the copyright 10,000,000; Operating loss during the start-up period (studio time lost) 2,000,000; Massive advertising campaign to launch the artist 3,000,000. What amount should be capitalized as cost of the copyright?

13.Gabetta Company recently acquired a copyright that now has a remaining legal life of 30 years. The copyright initially had a 50-year useful life. An analysis of market trend and consumer habit indicated that the copyrighted material will generate positive cash flows for approximately 25 years. What is the remaining useful life over which the entity can amortize the copyright?

14.At the beginning of the current year, Navarra Company signed an agreement to operate as a franchisee for an initial franchise fee of P12,000,000. On the same date, Navarra paid P4,000,000 and agreed to pay the balance in four equal annual payments of P2,000,000 at every year-end. The down payment is nonrefundable and no future services are required for the franchisor. The entity can borrow at 14% for a loan of this type. What is the initial measurement of the franchise?

15.At the beginning of the current year, Klengel Company bought a franchise from NOP Company for P4,080,000. An independent consultant estimated that the remaining useful life of the franchise was 50 years. The unamortized cost of the franchise was P1,360,000. Klengel Company has decided to amortize the franchise over the maximum period allowed. What amount should be recorded as amortization of franchise for the current year?

16.On January 1, 2017, Harrell Company signed a 12-year lease for warehouse space. The entity has an option to renew the lease for an additional 8-year period on or before January 1, 2020. During January 2019, Harrell made substantial improvement to the warehouse. The cost of the improvement was P1,080,000 with an estimated useful life of 15 years. On December 31, 2019, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this leasehold improvement for 2019. On December 31, 2019, what is the carrying amount of the leasehold improvement?

17.On January 1, 2017, Greenhouse Company signed an eight-year lease for office space. The entity has an option to renew the lease for an additional four-year period on or before January 1, 2024. During January 2019, two years after occupying the leased premises, the entity made general improvement to the premises costing P7,200,000 and having an estimated useful life of ten years. On December 31, 2019, Greenhouse's intention as to exercise of the renewal option is uncertain because this will depend upon future office space requirement. A full year depreciation expense is taken for the current year. What amount should be recorded as depreciation of leasehold improvement for the current year?

18.Perenyi Company, a major winery, started construction of a new facility in Palawan. The entity incurred the following costs in conjunction with the start-up activities of the new facility: Production equipment 16,300,000; Travel costs of salaried employees 800,000; Licensing and other fees in securing patent 280,000; Training of local employees for production and maintenance operations 2,400,000; Advertising costs 1,700,000. How much is expensed?

19.On January 1, 2019, Miklos Company purchased a patent with a cost of P10,400,000 and a useful life of 10 years. On December 31, 2020, the company determined that impairment indicators were present. The FVLCOD of the patent was estimated to be P7,200,000 while the VIU is estimated at P7,600,000. What amount should be recorded as impairment loss for 2020?

20.At year end, Leonardrose Company showed the following account balances : Patent 1,000,000; Deposit with advertising agency used to promote goodwill 800,000; Bond sinking fund 2,000,000; Excess of cost over FV of Identifiable net assets of acquired company 8,000,000; Trademark 1,800,000. What total amount should be reported as intangible assets?

21.Ophelie Company acquired a trademark relating to the introduction of a new manufacturing process. The entity incurred the following costs : Cost of trademark 7,000,000; Expenditure on promoting the new product 100,000; Employee benefits relating to the testing of the proper functioning of the new process 400,000. What total cost should be capitalized as intangible assets ?

22.On January 1, 2019, Bonjour Company purchases a patent with a cost of P5,200,000 and a useful life of 10 years. On December 31, 2020, the company determined that impairment indicators were present. The FVLCOD of the patent was estimated to be P4,100,000 while the VIU is estimated at P4,200,000. What amount should be recorded as impairment loss for 2020?

23.HIJ Company is an entity that provides engineering and operational support services to aircraft manufacturers. The entity received a confirmed order from an aircraft manufacturer to develop a new design for ducting the air conditioning of an aircraft. The entity incurred the following expenditures in the current year in pursuance of a project for the air conditioner duct: Salaries of engineers, consultants and technicians 800,000; Cost of developing the duct and producing the test model 1,000,000; Additional cost for revising the ducting process to ensure that product could be introduced in the market 1,200,000; Cost of developing the first model or prototype and testing it with air conditioners to ensure comparability 200,000; Cost of conference for the introduction of this new project 300,000. IJH Company incurred the following research and development costs in the current year: Equipment acquired for use in various research and development projects 1,950,000; Depreciation on the equipment 270,000; Materials used 400,000; Compensation costs of personnel 1,000,000; Outside consulting fees 300,000; Indirect costs appropriately allocated 500,000. JHI Company incurred the following costs during the current year: Modification to the formulation of a chemical product 270,000; Troubleshooting in connection with breakdowns during commercial production 300,000; Design of tools, jigs, molds and dies involving new technology 340,000; Seasonal or other periodic design changes to existing products 370,000Laboratory research aimed at discovery of new technology 430,000. What amount should be reported as research and development expense in the current year for HIJ, IJH and JHI, RESPECTIVELY? (answers should be separated by semi-colon; no space)

24.During the current year, KLM Company incurred the following costs: Research and development services performed by another entity for KLM Company 300,000; Design, construction and testing of preproduction prototype and model 400,000Testing in search for new product or process alternative 350,000; LMK Company incurred the following research and development costs during the current year: Equipment purchased for current and future projects 200,000; Equipment purchased for current project only 400,000; Research and development salaries of current project 800,000; Legal fees to obtain patent 100,000; Material and labor costs for prototype product 1,200,000. The equipment has a five-year useful life and is depreciated using the straight line. MKL Company incurred the following costs during the current year: Direct costs of doing contract research and development work for the government to be reimbursed by the government unit 800,000; Research and development costs not included above were: Depreciation 600,000; Salaries 1,400,000; Indirect costs appropriately allocated 400,000; Materials 360,000. What amount should be recognized as research and development expense in the current year for KLM, LMK and MKL, RESPECTIVELY? (answers should be separated by semi-colon; no space)

25.NOP Company made the following expenditures relating to product Y: Legal costs to file a patent on Product Y. Production of the finished product would not have been undertaken without the patent. 100,000; Special equipment to be used solely for development of product Y. The equipment has no other use and has an estimated useful life of four years 1,200,000; Labor and material costs incurred in producing a prototype 4,000,000; Cost of testing the prototype 1,600,000. OPN Company incurred the following costs during the current year: Design of tools, jigs, molds, and dies involving new technology. 250,000; Modification of the formulation of a process 320,000; Troubleshooting in connection with breakdowns during commercial production. 200,000; Adaptation of an existing capability to a particular customer's need as part of a continuing commercial activity. 220,000. PNO Company incurred the following costs related to a new solar-powered car: Salaries of laboratory employees researching how to build the new car 5,000,000; Legal fees for the patent application for the new car. 400,000; Engineering follow-up during the early stage of commercial production during the current year. 1,000,000; Marketing research to promote the new car. 600,000; Design, testing and construction of a prototype. 8,000,000. What amount should be reported as research and development expense in the current year by NOP, OPN and PNO, RESPECTIVELY? (answers should be separated by semi-colon;no space)