Reference no: EM132960494

Question - Transactions during the current year of the newly organized Pen Corporation included the following:

Paid legal fees of P60,000 and stock certificate costs of P20,000 to complete organization of the Corporation;

Hired temporary employee for 2 weeks to hand out pamphlets and candy, P15,450;

Patented a newly developed process with cost as follows:

- Legal fees to obtain the patent, P550,000

- Patent application and licensing fees, P65,000

- It is estimated that in 5 years other companies will have developed improved similar process, making the patent process obsolete.

Acquired both license to use a special type of container and a distinctive trademark to be printed on the container in exchange for 6,000 ordinary shares selling at P50 per share. The license is worth twice as much as the trademark, both of which may be used for 4 years.

Constructed a shed for P355,000 to house prototypes or experimental models to be developed in future research projects. Incurred salaries for an engineer and a chemist involved in product development totaling P200,400 in the current year.

How much should be recognized as total initial cost of the Trademark?