CK incurred $68,000 of research and development costs in its laboratory to develo a patent, which was granted on January 2, 2001. Legal fees and other costs associated with registration of the patent totalled $27,201. CK estimates that the economic life of the patent will be eight years. What amount should CK charge to patent amortization expense for the year ended December 31, 2008?

Question

Quizplus · Accepted Answer

The patent's cost is the legal fees and registration costs of $27,201. The research and development costs are not capitalized. The patent is amortized over its economic life of 8 years, so the annual amortization expense is $27,201 / 8 = $3,400.

CK Incurred $68,000 of Research and Development Costs in Its