Given Below Are Costs Incurred During 2019 and 2020 by a Company

question 95

Essay

Given below are costs incurred during 2019 and 2020 by a company that follows the policy of decreasing the intangible asset account directly as amortized.
Research was conducted to discover a new product and costs of $400,000 in 2019 and $800,000 in 2020 were incurred. After several months, a product was created and a patent secured for a cost of $180,000, effective as of July 1, 2020. The company expects to have increased revenues of $500,000 over the next several years. The patent is expected to be useful for the next 10 years.
A)Prepare a partial income statement for the year ended December 31, 2020.
B)How should the $800,000 cost incurred in 2020 be reported on the financial statements?

• A)Prepare a partial income statement for the year ended December 31, 2020.
• B)How should the $800,000 cost incurred in 2020 be reported on the financial statements?

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Definitions:

Coaching Strategy

An approach or technique employed to direct, instruct, and train a person or group of people, with the aim to achieve some goal or develop specific skills.

Storming Stage

A phase in team development characterized by conflict and competition as group members seek to establish their roles.

Initiating Behaviors

Actions taken to begin or set into motion any course of action or project.

Providing Feedback

The process of offering constructive criticism, support, or information to individuals or groups to facilitate improvement or growth.