Hopson Company incurred $900,000 of research and development costs in its laboratory to develop a new product. It spent $120,000 in legal fees for a patent granted on January 2, 2017. On July 31, 2017, Hopson paid $90,000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2017?
A)$900,000.
B)$210,000.
C)$1,110,000.
D)Some other amount.

Question

Quizplus · Accepted Answer

The cost of the patent is the sum of all costs directly attributed to securing the patent. This includes legal fees for obtaining and defending the patent. Therefore, the total amount that should be debited to Patents is the cost of research and development plus legal fees for obtaining and defending the patent, which is $900,000 + $120,000 + $90,000 = $1,110,000.

Hopson Company Incurred $900,000 of Research and Development Costs in Its