INTANGIBLE ASSETS Practice Problems On December 31, 2013, Czar Company exchanged 100,000 ordinary shares of P50 par value for the following assets: PRACTICE PROBLEM • • • A trademark valued at P1,500,000 A building, including land, valued at P6,500,000 (20% of the value is for the land) A franchise right. No estimate of the value is available at the date of exchange. The ordinary share of Czar Company is selling at P90 on the date of exchange. What amount should be recognized as measurement of the franchise on the date of exchange? 1,000,000 2 PRACTICE PROBLEM Sure Company builds and sells equipment used in manufacturing pharmaceuticals. On December 31, 2013, the entity has financial assets at fair value through profit or loss at P1,000,000, goodwill valued at P1,500,000, prepaid insurance at P50,000, patent valued at P2,500,000, and a customer list valued at P500,000. What amount should be reported as total intangible assets on December 31, 2013? 4,500,000 3 PRACTICE PROBLEM Vanity Company showed the following balances on December 31, 2013: • Copyright 500,000 • Deposit with advertising agency used to promote goodwill 400,000 • Bond sinking fund 1,000,000 • Excess of cost over fair value of identifiable net assets of acquired subsidiary 4,000,000 • Trademark 900,000 What amount should be reported as intangible assets? 5,400,000 4 PRACTICE PROBLEM Lovely Company provided the following transactions during the current year: • Paid legal fees ...
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