On January 1, 2022, Rover, Inc. purchased a patent giving it exclusive rights to manufacture a new type of synthetic clothing for P240,000. While the patent had a remaining legal life of 15 years at the time of purchase, Rover expects the useful life to be only eight more years. In addition, Rover purchased equipment related to production of the new clothing for P140,000. The equipment has a physical life of 10 years but Rover plans to use the equipment only over the patent's service life and then sell it for an estimated P20,000. Rover uses straight-line for all long-term assets. The amount charged to expense in 2022 related to the patent and equipment should be: P31,000. P45,000. P40,000. P38,000.

On January 1, 2022, Rover, Inc. purchased a patent giving it exclusive rights to manufacture a new type of synthetic clothing for P240,000. While the patent had a remaining legal life of 15 years at the time of purchase, Rover expects the useful life to be only eight more years. In addition, Rover purchased equipment related to production of the new clothing for P140,000. The equipment has a physical life of 10 years but Rover plans to use the equipment only over the patent's service life and then sell it for an estimated P20,000. Rover uses straight-line for all long-term assets. The amount charged to expense in 2022 related to the patent and equipment should be: P31,000. P45,000. P40,000. P38,000.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 9PA: For each of the following unrelated situations, calculate the annual amortization expense and...

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