Reference no: EM132829292

Beyonce, Inc. commenced operations at the beginning of the current year. A number of expenditures were debited to one account called Intangible Assets:

1. State incorporation fees and legal costs related to organizing the corporation: 100,000
2. Fire insurance premium for three-year period: 60,000
3. Purchase of a copyright: 200,000
4. Research and development costs: 400,000
5. Legal fees for filing a patent on a new product resulting from an R&D project: 50,000
6. Legal fees for successfully defending a patent developed from the project: 10,000
7. Initial franchise fee paid to a franchisor: 500,000
8. Advertising cost: 150,000
9. Consideration paid to purchase an entity/acquiree (with total assets of 6,000,000 and total liabilities of 2,200,000 at fair value): 5,000,000

Problem 1: How much is the correct amount that Beyonce, Inc. report as Intangible Assets?

A. 1,950,000
B. 1,960,000
C. 2,050,000
D. 2,350,000