Reference no: EM133042093
Question - In 2020, Inventors Corp, spend $392,000 on a research project. But by the end of 2020 it was impossible to determine whether any benefit would come from it. Inventors prepares financial statements in accordance with IFRS.
Required -
(a) What account should be charged for the $392,000, and how should it be shown in the financial statements for fiscal 2020?
(b) The research project is completed in 2021, and a successful patent is obtained. The research phase costs to complete the project are $71,000. The administrative and legal expenses incurred in obtaining patent number 481-761-0092 on Jan 3, 2021 total $10,000. The patent has an expected useful life of 5 years. Inventors Corp. will now begin investigating applications that use or apply the knowledge obtained on this project. Record these costs in journal entry form. Also, record patent amortization for a full year in 2021.
(c) In 2022, the company successfully defended the patent in litigation at a cost of $12,400. The victory extended the patent's life to December 31, 2030. What is the proper way to account for this cost? Also, record patent amortization (full year) in 2022.
(d) By early Sept 2022, at an additional cost of $101,000 Inventors had a product design that was technologically and financially feasible. Additional engineering and consulting cost of $66,000 were incurred in October 2022 to advance the design. How should they account for these 2022 costs?
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