On March 17, Advanced Technologies purchased a patent related to laser surgery techniques. The purchase price of the patent is $1,230,000. The patent is expected to benefit the company for the next five years. The company had the following additional costs: $23,000 in legal fees associated with the purchase and filing of the patent, $38,000 to advertise its new laser surgery techniques, and $48,000 to train employees. None of these additional costs were included in the purchase price or paid to the seller. Now assume that instead of purchasing the patent, Advanced Technologies spent $1,230,000 to develop the patent internally, consisting of personnel ($815,000), equipment ($309,000), and materials ($106,000). All additional costs were incurred for the same amount. What is the recorded cost of the patent? Answer is complete but not entirely correct. Total capitalized cost $ 2,483,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Brief Exercise 10-7 (Algo) Patent; research and development [LO10-1, 10-8]
On March 17, Advanced Technologies purchased a patent related to laser surgery techniques. The purchase price of the patent is
$1,230,000. The patent is expected to benefit the company for the next five years. The company had the following additional costs:
$23,000 in legal fees associated with the purchase and filing of the patent, $38,000 to advertise its new laser surgery techniques, and
$48,000 to train employees. None of these additional costs were included in the purchase price or paid to the seller. Now assume that
instead of purchasing the patent, Advanced Technologies spent $1,230,000 to develop the patent internally, consisting of personnel
($815,000), equipment ($309,000), and materials ($106,000). All additional costs were incurred for the same amount.
What is the recorded cost of the patent?
> Answer is complete but not entirely correct.
Total capitalized cost
$ 2,483,000
Transcribed Image Text:Brief Exercise 10-7 (Algo) Patent; research and development [LO10-1, 10-8] On March 17, Advanced Technologies purchased a patent related to laser surgery techniques. The purchase price of the patent is $1,230,000. The patent is expected to benefit the company for the next five years. The company had the following additional costs: $23,000 in legal fees associated with the purchase and filing of the patent, $38,000 to advertise its new laser surgery techniques, and $48,000 to train employees. None of these additional costs were included in the purchase price or paid to the seller. Now assume that instead of purchasing the patent, Advanced Technologies spent $1,230,000 to develop the patent internally, consisting of personnel ($815,000), equipment ($309,000), and materials ($106,000). All additional costs were incurred for the same amount. What is the recorded cost of the patent? > Answer is complete but not entirely correct. Total capitalized cost $ 2,483,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Ethical Decision Making
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education