e12-16 - a. What account should be charged for the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
a. What account should be charged for the $325,000, and how should it be shown in the financial statements? In accordance with FASB Statement No. 2, the $325,000 is a research and development cost that should be charged to R & D Expense and, if not separately disclosed in the income statement, the total cost of R & D should be separately disclosed in the notes to the financial statements. b. The project is completed in 2004, and a successful patent is obtained. The R & D costs to complete the project are $110,000. The administrative and legal expenses incurred in obtaining patent number 472-1001-84 in 2004 total $16,000. The patent has an expected useful life of 5 years. Record these costs in journal entry form. Also, record patent amortization (full year) in 2004. Journal Entry Research & Development Expenses Dr 110,000 Salary, Other Expenses Cr 110,000 The credit would go to the expense accounts where these expenses were recorded such as salaries of personnel working on this project and any other expenses
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

e12-16 - a. What account should be charged for the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online