Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:

Research for new pump design $ 2,400,000

Development of the new product 1,300,000

Legal and filing fees for a patent for the new design 52,000

Total $ 3,752,000

The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2018 fiscal year. What amount should Pribuss expense in its 2018 income statement related to the above expenditures?

Multiple Choice

A) $1,300,000

B) $2,400,000

C) $3,700,000

D) $3,752,000

Question

Jayden Glover

Business

29 June, 00:43

Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:

Research for new pump design $ 2,400,000

Development of the new product 1,300,000

Legal and filing fees for a patent for the new design 52,000

Total $ 3,752,000

The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2018 fiscal year. What amount should Pribuss expense in its 2018 income statement related to the above expenditures?

Multiple Choice

A) $1,300,000

B) $2,400,000

C) $3,700,000

D) $3,752,000

+5

Answers (1)

Know the Answer?

Clark · Answer 1

B) $2,400,000

Explanation:

Development cost as long as legal and filling fees to acquire the papent are part of the neccessary cost to acquire the intangible assets therefore, they are capitalzie and amortize along with the patent useful life.

Only the research cost will be considered expense for the period as they were incurred in arly stateges