Rooney Company incurred $560000 of research and development cost in its laboratory to develop a patent granted on January 1 2017. On July 31 2017 Rooney paid $84000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31 2017 should be:

Question

Quizplus · Accepted Answer

Research and development costs are expensed as incurred and not capitalized. Only the legal fees for the successful defense of the patent, $84,000, are capitalized and debited to the Patents account.

Rooney Company Incurred $560000 of Research and Development Cost in Its