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Corporation mentions that only one account is kept for intangible assets.
The account is shown below.
E12-16 (Accounting for R&D Costs) Leontyne Price Company from
time to time embarks on a research pro- gram when a special project
seems to offer possibilities.
In 2013, the company expends $325,000 on a research project, but by
the end of 2013 it is impossible to determine whether any benefit will be
derived from it.
(a) What account should be charged for the $325,000, and how should it
be shown in the financial statements?
(b) The project is completed in 2014, and a successful patent is obtained.
The R&D costs to complete the project are $110,000.
(c) In 2015, the company successfully defends the patent in extended
litigation at a cost of $47,200, thereby extending the patent life to
December 31, 2022.
(d) Additional engineering and consulting costs incurred in 2015
required to advance the design of a product to the manufacturing stage
total $60,000.
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ACCT 551 Week 2 Homework E13-11, E13-12, P13-9
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