Henson Company incurred $600,000 of research and development costs in its laboratory to develop a new product. It spent $90,000 in legal fees for a patent granted on January 2, 2015. On July 31, 2015, Henson paid $60,000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2015?

Question

Quizplus · Accepted Answer

The total amount that should be debited to Patents through July 31, 2015, is $150,000. This includes the $90,000 in legal fees for the patent and the $60,000 in legal fees for the successful defense of the patent. The $600,000 in research and development costs are not capitalized as part of the patent because they were incurred before the patent was granted.

Henson Company Incurred $600,000 of Research and Development Costs in Its