Henson Company incurred $600000 of research and development costs in its laboratory to develop a new product. It spent $90000 in legal fees for a patent granted on January 2 2017. On July 31 2017 Henson paid $60000 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?

Question

Quizplus · Accepted Answer

The total amount debited to Patents includes the legal fees for obtaining the patent ($90,000) and the legal fees for the successful defense of the patent ($60,000), totaling $150,000. Research and development costs are not capitalized as part of the patent.

Henson Company Incurred $600000 of Research and Development Costs in Its