During 2021, Ayayai Company incurred $2100000 of research and development costs in to develop a new product and paid $150000 in legal fees for a patent on the product. On July 31, 2022, Ayayai paid $1290000 for legal fees in a successful defense of the patent. Use the following tabular analysis to record the cost of the legal defense assuming that the bill was paid in cash. Assets Cash + Patents = Liabilities + Stockholders' Equity Retained Earnings Accounts Common Payable + Stock + Rev. - Exp. - Div. Decrease Cash and increase Expenses $1290000. Increase Patents and decrease Cash $1440000. Increase Cash and Revenues $1290000. O Increase Patents and decrease Cash $1290000.

During 2021, Ayayai Company incurred $2100000 of research and development costs in to develop a new product and paid $150000 in legal fees for a patent on the product. On July 31, 2022, Ayayai paid $1290000 for legal fees in a successful defense of the patent. Use the following tabular analysis to record the cost of the legal defense assuming that the bill was paid in cash. Assets Cash + Patents = Liabilities + Stockholders' Equity Retained Earnings Accounts Common Payable + Stock + Rev. - Exp. - Div. Decrease Cash and increase Expenses $1290000. Increase Patents and decrease Cash $1440000. Increase Cash and Revenues $1290000. O Increase Patents and decrease Cash $1290000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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How much of the transactions below should be charged against CELESTINE's Net Income for the year ended 2020?
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