On July 1, 2017, Polar Electronics, a manufacturer of microprocessors, acquired a patent for P425,000. The patent
Fantastic news! We've Found the answer you've been seeking!
Question:
On July 1, 2017, Polar Electronics, a manufacturer of microprocessors, acquired a patent for P425,000. The patent has a useful life of 10years but a legal life of 20 years. The policy f the company is to amortized its intangible assets using the straight line method to the nearest full month.On January 10, 2018 the company was engaged in a lawsuit relating to this patent but successfully defended it against it competitor with a cost of P63,750
In 2019 due to the rapidly changing nature of the micro processors,management changed its estimate of the useful life of the patent to four years excluding the current year.
This problem has 2 questions:
- Carrying value of the patent on December 31, 2018
- Amortization expense in 2020
Posted Date: