During 2013, Grouper Corporation spent $152,640 in research and development cost

Question

During 2013, Grouper Corporation spent $152,640 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $28,080 related to the patent were incurred as of October 1, 2013.

Date

Account Titles and Explanation

Debit

Credit

2013

2013

2013

2014

During 2013, Grouper Corporation spent $152,640 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $28,080 related to the patent were incurred as of October 1, 2013.

Explanation / Answer

2013 Research and development expenses 152640                    Cash 152640 2013 Patents 28080                    Cash 28080 2013 Amortization expense 702 =28080/10/12*3                 Patents 702 2014 Amortization expense 2808 =28080/10                 Patents 2808

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