Homework Answers
Research and development costs = $820,000
Legal fees for patent granted = $132,000
Legal fees to successfully defend patent = $68,000
Cost of patent = Legal fees for patent granted + Legal fees to successfully defend patent
= 132,000 + 68,000
= $200,000
Research and development costs is a revenue expenditure. It will not be considered to calculate the cost of patent.
Hence, amount to be debited to patent = $200,000
First option is the correct option.
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