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    julie anne mae mendoza
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    Sta Mesa Corporation has several intangible assets: 1. A franchise agreement signed in 2016 with an initial fee of P255,000 to be paid over 4 years with a present value of P180,000. Revenue from the franchise in 2016 was P2.7 million with 15% paid to the franchisor. 2. A patent developed in 2016 at a cost of P234,000 with legal fees of P46,200 and an estimated useful life of 8 years. 3. A trademark purchased in 2013 for P120,000 with P30,000 spent on litigation in 2015. It has an estimated useful life of 20 years.

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    Audprob

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    AUDIT-REV-1

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    Sta Mesa Corporation has several intangible assets: 1. A franchise agreement signed in 2016 with an initial fee of P255,000 to be paid over 4 years with a present value of P180,000. Revenue from the franchise in 2016 was P2.7 million with 15% paid to the franchisor. 2. A patent developed in 2016 at a cost of P234,000 with legal fees of P46,200 and an estimated useful life of 8 years. 3. A trademark purchased in 2013 for P120,000 with P30,000 spent on litigation in 2015. It has an estimated useful life of 20 years.

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    © All Rights Reserved
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    30 views1 page

    Audit Rev 1

    Uploaded by

    julie anne mae mendoza
    Sta Mesa Corporation has several intangible assets: 1. A franchise agreement signed in 2016 with an initial fee of P255,000 to be paid over 4 years with a present value of P180,000. Revenue from the franchise in 2016 was P2.7 million with 15% paid to the franchisor. 2. A patent developed in 2016 at a cost of P234,000 with legal fees of P46,200 and an estimated useful life of 8 years. 3. A trademark purchased in 2013 for P120,000 with P30,000 spent on litigation in 2015. It has an estimated useful life of 20 years.

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    © All Rights Reserved
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    of 1

    DFCAM LAS PINAS CITY

    AccountancY DePartment
    -
    nuOiting Problems zSEtvl AY 2017-2018

    YearlSection November 2AL7


    NAME

    PROBLEM NO, T

    Inforrnation conceming STA MESA CorporaUon's intangible assets is as follows:

    a. On January 1, 2016, Sgr Mesa $gned an agreement to operate as a frandrisee of DBD C-opy
    Seruice, tnt. for an iniUal ftanchise fte of P255,OOO. OJthis amorrnt' P75,000 was paid w!!!
    tf,e agrbment was signed, and the balance ls papble ln four annual paynrents of P45,000
    eacfr begtnnlng Janrrary 1; 20f7. The agrwnent provides that tE down payment is not
    refundable ard no fuUrre sirvies arc rcqr.dred of tfc frandrisor. The prsent \fialue at lanuary
    of the four annual paymenB dlscounterl ?t l+% (the lmplldt raE fur a loan of tltls
    4 2AL6 prSf,fOO.
    .gypgt ti Tlre agriemerrt atso prwtOes that 59S of thc rc:venuq from the franchlse
    rhirsi re paid to the trancfrtsor annually' sta Msa's revenue ftrbft- ffie ianchlse for 2016 was
    p2,700,000. SqMesa estimates the useful llfe of the franchise to De 10 years.

    b. Sta Mesa incurred P234,000 of enpsimenbl and development costs injts laboratory to
    deh/elop a patent, which was granted on lanuary 2, 2016. legal fees and other costs
    asmciated wittrrebismmon of $iL paenttotaled P4b,200. SE Mesa esfirnates$atthe useful
    life of the patent will be 8 years.

    c.' A tradema;k was purchased from LooseC.ompany 6r P120,000 on Juty t,were 2013. Expendihrres
    paid on July 1,
    fior successful litiiafion in defense of the tradenrark totaling P30,000
    2015. SA Uesa esttmates that the useful llfe of the trademark will be 20 years from the date
    of 6quisition.

    1. What is the patent's carrying value on Decernber 31. 2016?


    A. P49,200 B. P204,750 c. P247,8N D. P43,050

    2. What is the franchise's carrying value on Decsnber 31, 2016?


    (:. P185,49O
    A. P189,000 B. P203r844 D. P117,990

    3. What is the trademarlCs carrying value on Decernber 31, 2015?


    A. P130,000 B. P123,750 c. P114,000 D. P99,000

    4. What is the total franchlse-relaffi a(penses for the year endd December 31, 2016?
    A. 'P153,354 . B. P220,85+ c. P155,61C D' P173,964

    year ended
    What ls $e total oeenses resulur.g furn file intangibles tmnsactiorE for the
    December 31, 2016?
    A. PaZL,LL4 B. P231,114 c. P215,114 D. P195,504

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