1. Bratz Company purchased a patent on January 1, 2016 forP6,000,000. The original life of the patent was estimated to be 15years. However, in December 2021, the controller receivedinformation proving conclusively that the product protected by thepatent would be obsolete within four years. The entity decided towrite off the unamortized portion of the patent cost over fiveyears beginning in 2021.

What is the patent amortization for 2021?

a. 1,200,000

b. 1,000,000

c. 800,000

d. 400,000

---

2. Safeguard Company was granted a patent on a product onJanuary 1, 2011 with a 20-year useful life. To protect the patent,the entity purchased on January 1, 2021 for P4,500,000 a patent ona competing product which was originally issued on January 1, 2016.Because of the unique plant, the entity does not feel the competingpatent can be used in producing a product.

What is the amortization of the competing patent for 2021?

a. 450,000

b. 225,000

c. 300,000

d. 0