PROBLEM TWO (50 points) making wine in a box. The Calculate the capitalized rred

Question

PROBLEM TWO (50 points) making wine in a box. The Calculate the capitalized rred the following costs in 2017 related to developing a patented process for e process is expected to be commercially profitable for 7 years. et value of the patent and the amortization expense for 2017. 35,000 $15,000 opment of the yeast cultures to ferment the wine Iaste testing of the wines Attorney fees to register the patent Marketin 65,000 150,000 40,000 80,000 g costs of the new wine boxes Liability insurance Hired an attorney to defend the patent

Explanation / Answer

Research and development costs are capitalized when they result in a successful patent.

The cost of patent is below

Development of the yeast cultures to ferment the wine $15000

Taste testing of the wines $35000

Attorney Fees to register the patent $65000

Hired An Attorney to defend the patent $80000

Patent capitalized value $195000

Life of patent 7 years

Amortization Expense ($195000/7) $27857

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