P 750 306 15 180 BANAWE COMPANY began operations on January 2, 2010. Shown below is the company's trial balance prepared by its staff accountant for December 31, 2018. Banawe Company UNADJUSTED TRIAL BALANCE December 31, 2018 (in thousands of pesos) Debit Credit Cash P 60 Accounts receivable 150 Inventory 360 Equipment 2,400 Accumulated depreciation - Equipment Buildings 3,600 Accumulated depreciation - Buildings 1,200 Patents 1,650 Franchise agreement 285 Organization costs Goodwill 1,035 Accounts payable 36 Accrued wages payable Accrued taxes payable Bonds payable 1,500 Premium on bonds payable 105 Preference shares (P100 par value) 300 Ordinary shares (P25 par value) 3,300 Premium on share capital 660 Retained earnings (as of January 1) 1,200 Sales 2,700 Cost of goods sold 1,200 Selling and administrative expenses 900 211.946 $11.946 As a member of the audit team for Banawe Company, you have been assigned the audit of the company's intangible assets. Your investigation reveals the following: Patents The patents, acquired January 2, 2011, are being amortized over an expected useful life of 14 years. Improvements made to equipment covered by the patents costing P225,000 were debited to the account in January 2015. Amortization in 2015-2017 included amortization on the P225,000 for the remaining life of the relevant patent. It is determined that the P225,000 should have been expensed in 2015. It is further determined on December 31, 2017, that one of the patents has a remaining life of only 2 years. This patent was originally assigned a cost of P630,000 Franchise Agreement A franchise agreement was signed on January 1, 2018. A P150,000 fee was paid, covering a 5- year period, at the end of which the company may renew the agreement by paying P150,000. A decision on renewal has not been made as of December 31, 2018. The agreement calls for an annual payment of 5% of revenue. An entry debiting the account for P135,000 was made at the time of the cash payment for 2018. Organization Costs Organization costs include the unamortized portion of amounts paid to promote for services rendered at the inception of the corporation. These fees have been amortized, since inception, over an estimated 40-year life. The decision is made, as of December 31, 2018, to reduce the total period of amortization of organization costs to 12 years. Goodwill The goodwill account includes the following: P135,000 -- Legal expenses relative to incorporation. These were assigned to the account in January 2010 P600,000 -- Excess of cost over assigned net asset values of an enterprise acquired in early 2016 expected to be of value for an indefinite period. P300,000 - Paid to an advertising consulting firm in early 2017 for a major advertising effort expected to be beneficial for an indefinite period. No amortization has been taken on any amount in the Goodwill account c. d. a. What is the carrying value of the Patents on December 31, 2018? (3pts) b. What is the carrying value of the Franchise Agreement on December 31, 2018? (3pts) What is the value of the Organizational Costs on December 31, 2018? (3pts) What is the carrying value of goodwill on December 31, 2018? (3pts) What is the patent amortization for 2018? (3pts) e