The Davis Research Company engaged in the following six transactions during 2007: 1. Purchased a patent for
Question:
1. Purchased a patent for $35,000. Legal costs of $5,000 were also incurred.
2. Costs of improving patent:
Engineering costs ........ $20,000
Assembling and testing prototypes . 10,000
Other R&D costs ........ 25,000
3. Sold a prototype machine for $7,000. The research and development were performed in previous years.
4. Licensed a manufacturing process to another company and received $80,000 as an advance payment.
5. Successfully defended a patent infringement suit at a cost of $12,000.
6. Earned $5,000 of the advance payment on the licensed manufacturing process in Item 4.
Required
Prepare journal entries to record the preceding transactions.
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Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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