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Jessup Corp.will acquire a controlling stake in the outstanding shares of Parasol Inc.for
$9.2 million in cash.
-Beasley Corp.incurred $160,000 of basic research and $50,000 of development costs to develop a product for which a patent was granted on January 2, 2005.Legal fees and other costs associated with registration of the patent totalled $60,000.On March 31, 2010, Beasley paid $90,000 for legal fees in a successful defence of the patent.The total amount capitalized for the patent through March 31, 2010 should be
A)$360,000.
B)$270,000.
C)$200,000.
D)$150,000.

Question

Use the following information for questions 
Jessup Corp.will acquire a controlling stake in the outstanding shares of Parasol Inc.for
$9.2 million in cash.
-Beasley Corp.incurred $160,000 of basic research and $50,000 of development costs to develop a product for which a patent was granted on January 2, 2005.Legal fees and other costs associated with registration of the patent totalled $60,000.On March 31, 2010, Beasley paid $90,000 for legal fees in a successful defence of the patent.The total amount capitalized for the patent through March 31, 2010 should be
A)$360,000.
B)$270,000.
C)$200,000.
D)$150,000.

Quizplus · Accepted Answer

The total amount capitalized for the patent includes the registration costs of $60,000 and the legal fees for the successful defense of the patent of $90,000, totaling $150,000. The basic research and development costs are not capitalized.

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