Reference no: EM132919932

At January 1, 2005, an entity reported patent cost of € 1,920,000 and related accumulated amortization of €240,000. The patent was purchased on January 1, 2003, at which date the remaining legal life was 16 years. At January 1, 2005, the useful life of the patent was determined to be only 8 years from the date of acquisition. At January 1, 2005, the entity paid € 800,000, of which three-fourths was for a trademark, and one-fourth was for copyright with a useful life of 5 years. The entity considered the life of the trademark indefinite. Moreover, the entity agreed to pay €50,000 to another entity as consulting fee each year for 5 years payable every January 1.

Problem 1: What is the total carrying amount of intangible assets on January 1, 2005? Determine the total amount of expenses that should be recognized for 2005?