Patent Corp., a publicly accountable entity, incurred the following costs: $$\begin{array} { | l | r | }
\hline\text { Purchase of patents } & 18,000 \
\hline \text { Development of economic goodwill } & 12,000 \
\hline \text { Legal costs to successfully defend trademark } & 32,000 \
\hline \text { Lawsuit to successfully defend product brand } & 15,000 \
\hline
\end{array}$$
How much of the costs can be capitalized as intangible assets?
A)$18,000
B)$50,000
C)$65,000
D)$77,000

Question

Patent Corp., a publicly accountable entity, incurred the following costs: $$\begin{array} { | l | r | } 
\hline\text { Purchase of patents } & 18,000 \
\hline \text { Development of economic goodwill } & 12,000 \
\hline \text { Legal costs to successfully defend trademark } & 32,000 \
\hline \text { Lawsuit to successfully defend product brand } & 15,000 \
\hline
\end{array}$$
 How much of the costs can be capitalized as intangible assets?
A)$18,000
B)$50,000
C)$65,000
D)$77,000

Quizplus · Accepted Answer

The costs that can be capitalized as intangible assets are the purchase of patents and the legal costs to successfully defend the trademark. The development of economic goodwill and the lawsuit to successfully defend the product brand are not capitalized as intangible assets. Therefore, the total amount that can be capitalized is $18,000 + $32,000 = $50,000.

Patent Corp How Much of the Costs Can Be Capitalized as Intangible