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, 2021.On July 31, 2021, 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, 2021?

Question

Quizplus · Accepted Answer

$150,000 should be debited to Patents through July 31, 2021. This includes the $90,000 in legal fees for obtaining the patent and the $60,000 for successfully defending the patent. Research and development costs are not capitalized as part of the patent cost.

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