Young CoReceived a Patent on a New Type of Machine

question 57

Short Answer

Young Co.received a patent on a new type of machine.The legal costs and the patent application costs totaled $80, 000.R&D costs incurred to create the machine were $120, 000.In the year in which the company received the patent, $20, 000 was spent in the successful defense of a patent infringement suit.
Required:
At what amount should the patent be capitalized?

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Definitions:

Account Names

Specific titles given to accounts that reflect the nature of the transactions they represent in the accounting records.

Account Title

The name given to an account that reflects the type of transaction it represents, such as "Sales Revenue" or "Accounts Payable."

Ledger

A comprehensive set of accounts that records all financial transactions of a business, organized within a book or digital system.