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

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

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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

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