In January 2020, White Tea Ltd paid $30,000 in legal fees for a patent. January through April, White tried out different formulas (spending $74,000 on direct materials and direct labour) and were finally successful in early May. For the rest of the year, White worked on product development spending $35,000 on direct material, $50,000 on direct labour, $70,000 on executive salaries, $12,000 on interest (on loan taken out specifically to finance this R&D project), $15,000 on employee training, and $37,000 3 on depreciation on the building which is used exclusively for the R&D project. 4 S Required (a, b, and c): 6 7 (a) (1 mark) Calculate amortization on the patent for the year ended December 31, 2020 if the patent has a legal life of 25 years and is expected to yield economic benefits over 20 years. 12 (b) (3 marks) Calculate the value of R&D asset (i.e., what amount will be capitalized for the ongoing project started in January?). 8 9 10 11 TE 14 15 16 17 (c) (2 marks) Describe the six development criteria for captialization of intangible assets. (Give me two good points - one mark each) 18 19 13