The statement of financial position of Walsh Corporation as of December 31, 2019 reported the Intangible Assets, net as follows:

Patent A P1,680,000 Patent B 2,450,000 P4,130,000 During the course of your audit, you noted the following. a. Patent A was purchased for P1,920,000 on January 1, 2018, at which date the remaining legal life was sixteen years. On January 1, 2020, Walsh determined that the useful life of the patent was only eight years from the date of acquisition.

b. On May 1, 2020, Walsh sold Patent B in exchange for a P5,000,000 non-interest bearing note due on May 1, 2023. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at May 1, 2020 was 14%. The patent was purchased for P3,150,000 on September 1, 2016. On that date, the remaining legal life was fifteen years, which was also determined to be the useful life.

c. On January 3, 2020, in connection with the purchase of a trademark from Joe Corporation, the parties entered into a noncompetition agreement and a consulting contract. Walsh paid Joe P8,000,000, of which three-quarters was for the trademark and one-quarter was for Joes agreement not to c compete for a five-year period in the line of business covered by the trademark. Walsh considers the life of the trademark to be indefinite. Under the consulting contract, Walsh agreed to pay Joe P500,000 annually on January 3 for five years. The first payment was made on January 3, 2020.

d. At December 31, 2020, Walsh determined the recoverable amount of the intangible assets as follows: Patent A P1,350,000 Trademark 5,500,000 Noncompetition agreement 1,800,000

QUESTIONS: Based on the above and the result of your audit, determine the following: 1. Gain on sale of Patent B

a. P2,620,000. c. P 995,000

b. P1,012,500. d. P 977,500

2. Total amortization to be recognized in 2020

a. P680,000. c. P 767,500

b. P750,000. d. P1,950,000

3. Total impairment loss to be recognized in 2020

a. P750,000. c. P550,000

b. P620,000. d. P 50,000

4. Intangible assets to be recognized in the statement of financial position as of December 31, 2020

a. P7,750,000 c. P8,450,000

b. P7,950,000 d. P8,850,000

5. In auditing intangible assets, an auditor most likely would review or recompute amortization and determine whether the amortization period is reasonable in support of managements financial statement assertion of

a. Valuation. c. Existence

b. Completeness. d. Rights