Davis Research Company engaged in the following 5 transactions during 2019: 1. Purchased a patent for $35,000. Legal costs of $5,000 were also incurred. 2. Costs paid to improve patent: Engineering costs $20,000 Assembling and testing prototypes 10,000 Other R&D costs 25,000 3. Licensed a manufacturing process to another company and received $80,000 as an advance payment. 4. Successfully
Davis Research Company engaged in the following 5 transactions during 2019: 1. Purchased a patent for $35,000. Legal costs of $5,000 were also incurred. 2. Costs paid to improve patent: Engineering costs $20,000 Assembling and testing prototypes 10,000 Other R&D costs 25,000 3. Licensed a manufacturing process to another company and received $80,000 as an advance payment. 4. Successfully
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Davis Research Company engaged in the following 5 transactions during 2019:
1. Purchased a patent for $35,000. Legal costs of $5,000 were also incurred.
2. Costs paid to improve patent:
Engineering costs $20,000
Assembling and testing prototypes 10,000
Other R&D costs 25,000
3. Licensed a manufacturing process to another company and received $80,000 as an advance payment.
4. Successfully defended a patent infringement suit at a cost of $12,000.
5. Earned $5,000 of the advance payment on the licensed manufacturing process in Item 4.
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