Lopez Corp

question 9

Multiple Choice

Lopez Corp.incurred $420,000 of research and development costs to develop a product for which a patent was granted on January 2, 2002.Legal fees and other costs associated with registration of the patent totaled $80,000.On March 31, 2007, Lopez paid $120,000 for legal fees in a successful defense of the patent.The total amount capitalized for the patent through March 31, 2007 should be

• A)$200,000.
• B)$500,000.
• C)$540,000.
• D)$620,000.

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Definitions:

Convertible

A type of financial security, such as a bond or preferred stock, that can be converted into a specified amount of another type, typically common stock, at the holder's option.

Bond Yields

The amount of return an investor realizes on a bond, usually expressed as a percentage of the bond's value.

Present Value

The present worth of a future sum of money or series of cash flows, when discounted at a specific rate of interest.

Coupon Payment

The interest payment made to the bondholders by the issuer of the bond.