The cost of developing a prototype would probably be capitalized by which of the following companies?
A)Lego.
B)Southwest Airlines.
C)Walmart.
D)Cedar Fair.

Question

Quizplus · Accepted Answer

Lego is a company that produces physical products, including toys and games. Developing a prototype would likely be considered a research and development expense that should be capitalized as an intangible asset on the company's balance sheet. Southwest Airlines, Walmart, and Cedar Fair are not necessarily focused on physical product development and may not have the same need to capitalize prototype development costs.

The Cost of Developing a Prototype Would Probably Be Capitalized