Aspen,Inc.developed a new horse transport device and incurred research and development costs of $250,000.Rather than continue with their own research,Aspen decided to purchase a patent for a similar design from Vail,Inc.for $350,000.What are the total assets and expenses for these developments?

Question

Quizplus · Accepted Answer

The purchase of the patent for $350,000 would become an asset on Aspen's balance sheet, which would bring total assets to $350,000 ($250,000 research and development costs + $350,000 purchase of patent). The expenses for these developments would be the $250,000 in research and development costs, as the purchase of the patent is now considered an asset and not an expense. Therefore, the total expenses would be $250,000, making choice C the correct answer.

Aspen,Incdeveloped a New Horse Transport Device and Incurred Research and Development