PROBLEM 9: EM[ KOUSSI CORP. has its own research department. However, the company purchases patents from time to time. The following is a summary of transactions involving patents now owned by the company. During 2006 and 2007, Emi Koussi spent a total of P459,000 in developing a new process that was patented (Patent A) on April 1, 2008,- additional legal and other costs of P50,000 were incurred. A patent (Patent B) developed by Nonoy Inventor, an inventor, was purchased by for P182500 on December 1, 2009, on which date it had an estimated useful life of 12 1/2 years. During 2008, 2009, and 2010, research and development activities cost P510,000. No additional patents resulted from these activities. A patent infringement suit brought by the company against a competitor because of the manufacture of articles infringing on Patent B was successfully prosecuted at a cost of P42,600. A decision in the case was rendered in June 2010. On Iuly 1, 2011, Patent C was purchased for P172800. This patent had 16 years yet to run. During 2012, Emi Koussi expended P180,000 on patent development. However, the company is still undecided as to how the patent, if approved by the Bureau of Patents, will generate probable future economic benefits. Assume that the legal life of each patent is also its useful life. 1. What is Patent A's carrying value on December 31,2012? A. P120,888 C. P38,125 B. P497,125 D. P388,1 13 2. What is Patent B's carrying value on December 31,2012? A. P141,250 C. P32,092 B. P28,906 D. P173342 3. What is Patent C's carrying value on December 31,2012? A. P162,000 C. P159,840 B. P327,600 D. P156600 4. What is the total patent amortization expense to be reported in Emi Koussi's income statement for the year ended December 3 1, 20 12? A. P37,300 C. P74,325 B. P28,741 D. P28,300