Barako Co. developed a trademark to distinguish its products from those of its competitors. Through advertising and other means, the company is seeking to establish significant product identification to increase future sales. The similarity between the trademark costs and other intangible and operating costs
Barako Co. developed a trademark to distinguish its products from those
of its competitors. Through advertising and other means, the company
is seeking to establish significant product identification to increase
future sales. The similarity between the trademark costs and other
intangible and operating costs has caused some confusion over proper
accounting. The following items are being treated as part of the cost of
the trademark:
Design cost of trademark 1,500,000
Legal fees of registering trademark 150,000
Advertising to establish recognition of trademark 200,000
Registration fee with Patent Office 50,000
Through renewals, the trademark is expected to have an unlimited life.
Required:
How much is capitalized as trademark?
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