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Suddenly Salad had the following expenditures related to developing its trademark: General advertising costs $ 260,000 Advertising specifically focused on the trademark 110,000 Legal fees
Suddenly Salad had the following expenditures related to developing its trademark: General advertising costs $ 260,000 Advertising specifically focused on the trademark 110,000 Legal fees to register trademark 53,200 Registration and design fees for the trademark 38,800 Legal fees for successful defense of the new trademark 31,200 Total $ 493,200 During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the trademark. Management contends that all of the costs increase the value of the trademark; therefore, all the costs should be capitalized. Required: 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? 2. Which of the above costs should the company report as expense in the income statement
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