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In 2 0 2 4 , Space Technology Company modified its mode 2 2 satellite to incorporate a new communication device. The company made the
In Space Technology Company modified its mode satellite to incorporate a new communication device. The company made
the following expenditures:
Basic research to develop the technology
Engineering design work
Development of a prototype device
Acquisition of equipment
Testing and modification of the prototype
Legal and other fees for patent application on the new comunication systen
legal fees for successful defense of the new patent
Total
The equipment will be used on this and other research projects. Depreciation on the equipment for is $
During your yearend review of the accounts related to intangibles. you discover that the company has capitalized all of the above as
costs of the patent. Management contends that the device simply represents an improvement of the existing communication system of
the satellite and, therefore, should be capitalized.
Required:
Prepare correcting entries that reflect the appropriate treatment of the expenditures.
Note: if no entry is required for o transoctionevent select No journal entry required" In the first occount fleld.
Journal entry worksheet
Record the correcting entry for RSD costs.
Note: Enter debits before credits.
Journal entry worksheet
Record the correcting entry for the equipment, if any.
Note: Enter debits before credils.
Journal entry worksheet
Record the correcting entry to record depreciation on equipment used in RsD
projects.
Note: Enter debits before credits.
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