Rooney Company incurred $280,000 of research and development cost in its laboratory to develop a patent granted on January 1, 2010. On July 31, 2010, Rooney paid $42,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2010, should be:
A) $280,000.
B) $42,000.
C) $322,000.
D) $238,000.

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 are capitalized, which amounts to $42,000.

Rooney Company Incurred $280,000 of Research and Development Cost in Its