Suddenly Salad had the following expenditures
related to developing its trademark:
General advertising costs
$ 320,000
Advertising specifically focused on the trademark
101,000
Legal fees to register trademark
50,500
Registration and design fees for the trademark
37,500
Legal fees for successful defense of the new trademark
37,000
Total
$ 546,000
During your year-end review of the accounts
related to intangibles, you discover that the
company has capitalized all the above as costs of
the trademark. Management contends that all of
the costs increase the value of the trademark;
therefore, all the costs should be capitalized.
Required:
1. Which of the above costs should the company
capitalize to the Trademark account in the balance
sheet?
2. Which of the above costs should the company
report as expense in the income statement?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Which of the above costs should the company capitalize to the Trademark account in the balance sheet?
Total costs capitalized
