Ask Question
5 March, 06:47

Pierce Company incurred $150,000 of research and development costs in its laboratory to develop a new product. It spent $20,000 in legal fees for a patent granted on January 2, 2017. On July 31, 2017, Pierce paid $15,000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2017?

A. (x) $35,000

B. $185,000

C. Some other amount

D. $150,000

+4
Answers (1)
  1. 5 March, 07:30
    0
    A. $35,000

    Explanation:

    The first $150,000 were invested in research and development of the product itself, not the patent. Thus, this amount should be debited to research and development expenses.

    The only expenses directly related to the patent itself are the $20,000 spent on legal fees on January 2, 2017, and the $15,000 for legal fees in a successful defense of the patent on July 31, 2017.

    Therefore, the total amount that should be debited to Patents (P) is:

    P = $20,000 + $15,000 = $35,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Pierce Company incurred $150,000 of research and development costs in its laboratory to develop a new product. It spent $20,000 in legal ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers