Reference no: EM13872221
Purpose: This exercise will give you practice in identifying items that are to be classified as costs associated with various intangible assets.
The Redskins Corporation incurred the following costs during January 2014:
1. Attorneys' fees in connection with organization of the corporation
2. Meetings of incorporators, state filing fees, and other organization costs to begin corporation
3. Improvements to leased offices prior to occupancy
4. Costs to design and construct a prototype
5. Testing of prototype
6. Troubleshooting breakdowns during commercial production
7. Fees paid to engineers and lawyers to prepare patent application; patent granted January 22
8. Payment of six months rent on leased facilities
9. Stock issue costs
10. Payment for a copyright
11. Materials purchased for future research and development projects; materials have alternative future use
12. Costs to advertise new business
13. Costs for one-time activities to start a new operation.
Instructions
(a) For each item above, identify what account should be debited to record the expenditure.
(b) Indicate in which classification the related account will be reported in the financial statements.