Rooney Company incurred $420,000 of research costs in its laboratory to develop a patent granted on January 1, 2014. On July 31, 2014, Rooney paid $63,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2014, should be:

Question

Quizplus · Accepted Answer

Research costs are expensed as incurred and not capitalized. Only the legal fees for the successful defense of the patent are capitalized, so $63,000 is debited to Patents.

Rooney Company Incurred $420,000 of Research Costs in Its Laboratory