Question
Pharoah Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2019, the company expends $322,500
Pharoah Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2019, the company expends $322,500 on a research project, but by the end of 2019 it is impossible to determine whether any benefit will be derived from it.
(c)
In 2021, the company successfully defends the patent in extended litigation at a cost of $44,000, thereby extending the patent life to December 31, 2028. What is the proper way to account for this cost? Also, record patent amortization (full year) in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation | Debit | Credit |
(To record legal cost of successfully defending patent) | ||
(To record one years amortization) |
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