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Intangibles Problems

Priencious Company should not recognize any amount for the franchise right on the date of exchange, as no estimate of its value was available. Jewelcess Company should report a total of P7,000,000 as intangible assets on December 31, 2015, which is the sum of the financial assets, goodwill, patent, and customer list balances provided. Jewcious Company should report a total of P8,000,000 as intangible assets on December 31, 2015, which is the sum of the copyright, trademark, and excess of cost over fair value of net assets acquired balances provided.

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Jao Flores
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64 views1 page

Intangibles Problems

Priencious Company should not recognize any amount for the franchise right on the date of exchange, as no estimate of its value was available. Jewelcess Company should report a total of P7,000,000 as intangible assets on December 31, 2015, which is the sum of the financial assets, goodwill, patent, and customer list balances provided. Jewcious Company should report a total of P8,000,000 as intangible assets on December 31, 2015, which is the sum of the copyright, trademark, and excess of cost over fair value of net assets acquired balances provided.

Uploaded by

Jao Flores
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

On December 31, 2015, Priencious Company exchange 100,000 ordinary share for P 50 par value and the share
is selling at P 100 at the date of exchange for the following assets:
A trademark valued at P 2,500,000.00
A building, including land, valued at P 5,500,000 (20% of the value is for the land)
A Franchise right. No estimate of the value is available at the date of exchange.

What amount should be recognized as measurement of the franchise on the date of exchange?

2. Jewelcess Company builds and sells equipment used in manufacturing pharmaceuticals. On December 31, 2015,
the entity has financial assets at fair value through profit or loss at P 1,000,000.00, Goodwill at P 2,500,000.00,
Prepaid Insurance at P 500,000.00, Patent at P 2,000,000.00 and Customer list at P 1,500,000.00

What amount should be reported as total intangible assets on December 31, 2015?

3. Jewcious Company showed the following balances on December 31, 2015, the entity has Copyright at P
500,000.00, Deposit with advertising agency used to promote goodwill at P 500,000.00, Bank Sinking Fund at P
1,000,000.00, Trademark at P 1,000,000.00, Excess of cost over fair value of identifiable net asset of the
acquired subsidiary at P 3,500,000.00 and Research and Development cost at P 1,500,000.00.

What amount should be reported as total intangible assets on December 31, 2015?

4. On January 1, 2012, Prinwell Company purchased a patent for a new consumer product for 900,000. At the time
of purchase the patent is valid for 15 years. However, the patent’s useful life is estimated only 10 years due to
the competitive nature of the product. On December 31, 2015, the product was permanently withdrawn from
sale under governmental order because of a potential health hazards in the product.

What amount should be charged against income of 2014 if amortization is recorded at the end of each year?

5. On January 1, 2015, Jewrincess Company bought a trademark from LAMI KAH Company for P 3,000,000.00,
expenditure on promoting the new product at P 50,000.00 and employee benefits relating to testing of new
process at P 200,000.00. The entity retained an independent consultant who estimated the trademark’s life to
be indefinite. The carrying amount of the trademark was P 1,500,000.00 on the books of LAMI KAH Company.

On December 31, 2014, what is the carrying amount of the trademark?

6. At year-end, Jewciousness Company reported assets of P 5,000,000 and Liabilities of P 2,000,000.00. The
carrying amount of the assets approximate fair value, except for land which has affair value that is P 300,000
greater than carrying amoun. On the same date, BLEHWISH Company paid P 6,000,000.00 to acquired the
Jewciuosness Company.

What amount of goodwill should be recorded by the acquirer as a result of this purchase?

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