Question
Exercise 2: Costs of Intangible Assets Womack Corporation was organized in early 2018. During its first quarter, Womack had the following cash expenditures: Attorneys fees
Exercise 2: Costs of Intangible Assets
Womack Corporation was organized in early 2018. During its first quarter, Womack had the following cash expenditures:
Attorneys fees in connection with the organization of the corporation $30,000
State filing fees and other incorporation costs 7,500
Purchase of furniture and equipment 50,000
Purchase of a patent 85,000
Legal and other fees for transfer of the patent 6,000
Advertising costs 10,000
Research and development costs 12,500
Total $201,000
Which costs should be capitalized? Which costs should be expensed?
Prepare a summary journal entry to record the $201,000 in cash expenditures.
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