1. Goodwill

a. generated internally should not be capitalized unless it is probable that there is an inflow of future economic benefits

b. is measured by assigning a value to the individual attributes that compromise its existence

c. is recognized only when resulting from the acquisition of an existing entity at a price higher than the fair value of the net identifiable assets acquired.

d. exists in any company that has earnings higher than those of the competitors.

2.The capitalized software cost shall be amortized

a. on a straight line basis over its useful life

b. using a ratio of current revenue over total expected revenue from the product.

c. using the greater of the straight line rate or the ratio of current revenue over total expected revenue from the product.

d. uniformly over twenty years.

3.An entity is developing a new production processs. During 2019, expenditures incurred was P200,000 of which P150,000 was incurred before December 1,2019 and P50,000 was incurred between December 1,2019 and December 31,2019. The entity is able to demonstrate that at December 1,2019, the production process met the criteria for recognition as an intangible asset.

How would the foregoing expenditures be recognized in the financial statement at December 31,2019?

a. The production processs is recognized as an intangible asset at a cost of P50,000 and the P150,000 expenditure incurred before December 1 is recognized as an expense.

b. The 150,000 expenditure incurred before December 1 is recognized as an intangible asset and the P50,000 expenditure incurred between December 1 and December 31 is recognized as expense.

c. The production process is recognized as an intangible asset at a cost of P200,000.

d. The P200,000 expenditures incurred during the year is recognized as expense.

4.Irrespective of wether there is any indication of impairment, an entity shall test for impairement annually by comparing its carrying amount its carrying amount with its recoverable amount.

a. an intangible asset with an indefinite useful life.

b. an intangible asset with an definite useful life.

c. an intangible asset already available for use.

d. A PPE measured using the revaluation model.

5.On November 1,2019 a newly established manufacturing outfit paid cash to acquire a patent for P1,200,000, a copyright for P750,000 , and a franchise for P60,000. The patent expires at the end of 2020, has a total legal life of 20 years in the Philippines and is expected to produce benefits only for 5 years. The copyright has a service life of 10 years. The franchise allows the company to be exclusive sales agent for two years effective November 1, 2019.

The amortization amount for the intangibles in 2019 is

A. P 57,500

B. P65,500

C. P70,500

D. P120,500

6.Ruby , Inc incurred P816,000 of research and development costs in its laboratory to develop a patent which was granted on january 2,2019. Additional costs of 152,000 wee incurred in the registration of patent. The estimated economic life of the patent is eight years.

What amount should Ruby charge to patent amortization expense for the year ended December 31,2019?

a. 968,000

b. 102,000

c.19,000

d. 0