E12-5 (Correct Intangible Assets Account) As the recently appointed auditor for William J. Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2014, are prepared. The controller for William J. Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below.


E12-16 (Accounting for R&D Costs) Leontyne Price Company from time to time embarks on a research pro- gram when a special project seems to offer possibilities.


In 2013, the company expends $325,000 on a research project, but by the end of 2013 it is impossible to determine whether any benefit will be derived from it.


(a) What account should be charged for the $325,000, and how should it be shown in the financial statements?

(b) The project is completed in 2014, and a successful patent is obtained. The R&D costs to complete the project are $110,000.


(c) In 2015, the company successfully defends the patent in extended litigation at a cost of $47,200, thereby extending the patent life to December 31, 2022.

(d) Additional engineering and consulting costs incurred in 2015 required to advance the design of a product to the manufacturing stage total $60,000.

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