Trisha Kareen F.

Clarito
BSA 2
Case 1: Patent 1
Requirements:
a. Provide the adjusting entries.
Entries Made (EM)
2021
July 1 Patent- 1 P 120,000
Cash P 120,000
#

Dec. 31 Amortization expense P 5,000

Accumulated amortization P 5,000
#

2022
July 1 Patent P 35,000
Cash P 35,000
#

Dec. 31 Amortization expense P 12,500

Accumulated amortization P 12,500
#
Should be Entries (SBE)
2021
July 1 Patent - 1 P 120,000
Cash P 120,000
#

Dec. 31 Amortization expense P7,500

Accumulated amortization P 7,500
#
2022
July 1 Other expenses P 35,000
Cash P 35,000
#

Dec. 31 Amortization expense P 15,000

Accumulated amortization P 15,000
#

Adjusting Journal Entries (AJE)

2021
Dec. 31 Amortization expense P 2,500
Accumulated amortization P 2,500
#
2022
July 1 Other expenses P35,000
Patent P 35,000
#
Dec. 31 Amortization expense P 2,500
Accumulated amortization P 2,500
#
b. Compute for the adjusted balances of the accounts related to Patent 1

2021 2022
Patent 1 120,000 120,000
Accumulated amortization (7,500) (22,500)
Amortization expense 7,500 15,000
Other expenses 35,000

Purchased on Patent 1 P 120,000

less: Amortization (120,000/8) (15,000) x 6/12 (7, 500)
Patent 1 on Dec 31, 2021 P 112,500

Patent 1 on Dec 31, 20x1 112,500

less: Amortization (120,000/8) (15,000)
Patent 1 on Dec 31, 2022 P 97,500

Accumulated amortization 2021 P 7,500

Accumulated amortization 2022 (7,500+ 15,000) 22,500
Other expenses 2022 35,000
Case 2: Patent 2
a. Provide the adjusting entries.
Entries Made (EM)
2021
Dec. 31 Patent- 2 P 200,000
Cash P 200,000
#

2022
Sept. 1 R&D expense P 60,000
Cash P 60,000
#

Dec. 31 Amortization expense P 8,000

Accumulated amortization P 8,000
#

Should be Entries (SBE)

2021
Dec. 31 R&D expense P 200,000
Cash P 200,000
#
2022
Sept. 1 Patent-2 P 60,000
Cash P 60,000
#
Dec. 31 Amortization expense P 1000
Accumulated amortization P 1000
#
Adjusting Journal Entries (AJE)
2021
Dec. 31 R&D expense P 200,000
Cash P 200,000
#
2022
Sept. 1 Patent-2 P 60,000
R&D expense P 60,000
#
Dec. 31 Accumulated amortization P 7,000
Amortization expense P 7,000
#
b. Compute for the adjusted balances of the accounts related to Patent 2

Patent 2 on Dec 31, 2021 0

Research and Development cost 200,000
Accumulated amortization 2022 1,000

Registration of Patent 2 60,000

Less: Amortization (60,000/20) x 4/12 (1,000)
Patent 2 on Dec 31, 2022 59,000

1. Patent 2 (net 2021) = P 0

2. Patent 2 (net 2022) = P 59,000
3. Accumulated amortization 2021= P 0
4. Accumulated amortization 2022= P 1,000
5. R&D Expense = P 200,000

Case 3: Organization Cost

a. Provide the adjusting entries.
Entries Made (EM)
2021
Organization costs P 80,000
Cash P 80,000
#

Amortization expense P 16,000

Accumulated amortization P 16,000
#

2022
Amortization expense P 16,000
Accumulated amortization P 16,000
#

Should be Entries (SBE)

2021
Other expenses P 80,000
Cash P 80,000
#
Adjusting Journal Entries (AJE)
2021
Other expenses P 80,000
Organization costs P 80,000
#

Accumulated amortization P 16,000

Amortization expense P 16,000
#
2022
Accumulated amortization P 16,000
Amortization expense P 16,000
#
b. Compute for the adjusted balances of the accounts related to Organization cost

1. Organizational expense 2021= P 80,000

2. Organizational expense 2022= P 0

Case 4: Software costs

a. Provide the adjusting entries.
Entries Made (EM)
2021
Dec. 31 Software costs P 100,000
Cash P 100,000
#
2022
Dec. 31 Software costs P 90,000
Cash P 90,000
#

Amortization expense P 10,000

Accumulated amortization P 10,000
#
Should be Entries (SBE)
2021
Dec. 31 R&D expense P 100,000
Cash P 100,000
#
2022
Dec. 31 R&D expense P 90,000
Cash P 90,000
#

Adjusting Journal Entries (AJE)

2021
Dec. 31 R&D expense P 100,000
Software costs P 100,000
#
2022
Dec. 31 R&D expense P 90,000
Software costs P 90,000
#
 Accumulated amortization P 10,000
Amortization expense P 10,000
#

b. Compute for the adjusted balances of the accounts related to Software cost
1. Software Cost 2021 = P 0
2. Software Cost 2022= P 0
3. R&D Expense 2021= P 100,000
4. R&D Expense 2022= P 90,000

Case 5: Adjusted Balances

2021 2022
Patent 1 P 120,000 P 120,000
Accumulated amortization (7,500) (22,500)
Patent 2 0 60,000
Accumulated amortization 0 (1,000)
Organization costs 0 0
Accumulated amortization 0 0
Software costs 0 0
Accumulated amortization 0 0
Amortization expense 7,500 16,000
R&D expense 300,000 90,000
Other expenses 80,000 35,000