Answer:
$185,000
Explanation:
Pierce Company incurred $150,000 of research and development costs in its laboratory to develop a new product.
It spent $20,000 in legal fees for a patent granted on January 2, 2017.
On July 31, 2017, Pierce paid $15,000 for legal fees in a successful defense of the patent.
Therefore the total amount that should be debited to Patents through July 31, 2017 is $185,000 which is the total of the research and development costs and the legal fees to date. (150,000 + 20,000 + 15000)
In accounting, legal fees on patents are NOT expensed. They are capitalized to increase the value and lifespan of the patents because it boosts the value of those patents by causing competitors to refrain from using them.
Hence the legal costs are debited to the patents accounts as well.
Answer:
$185000
Explanation:
legal fees on patents are capitalized i.e they are added to the cost of obtaining a patent for a research or an invention made by a company or individual and also the cost of the research or invention as well.
cost of the research = $150000
legal fees for a patent = $20000
legal fees for defense of patent = $15000
total amount debited to Patents = cost of research + legal fees for a patent + legal fees fr defense of patent
= $150000 + $20000 + $15000
= $185000
