Question
On January 1,2011, Lava Company purchased a patent for a new consumer product for P900,000. At the time of purchase, the patent was valid for
On January 1,2011, Lava Company purchased a patent for a new consumer product for
P900,000. At the time of purchase, the patent was valid for 15 years. However, the patent's
useful life was estimated to be only 10 years due to the competitive nature of the product. On
December 31, 2014, the product was permanently withdrawn from sale under governmental
order because of a potential health hazard in the product. What amount should be charged
against income of 2014 if amortization is recorded at the end of each year?
A. 90,000 C. 630,000
B. 540,000 D. 720,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started