hey there,
i was wondering if anyone could help me with the following questions. I would really appreciate your help .
Multiple choice:
A company obtained a patent for a drug it developed. The amount capitalized in asocciation with the drug patent will include:
a. Only the cost of developing the drug.
b. Only the cost of filing for a patent.
c. The cost of developing the drug and filing for a patent.
d. Neither the cost of developing the drug and filing for a patent.
I'm confused between b and c.
True/False:
1. It is assumed that all property,plant and equipment will be consumed over time.
2. an estimate of un-collectable accounts is generally based on the company's historical experience rather than on known un-collectable accounts.
3. non-current assests include all types of property, plant and equipment as well as intangible assets without non-current prepaid.
I think it is False, True and False. I would like to confirm it with someone though.
It seems to me that c. is the best answer to the first question.
I agree with your true/false answers.
Hello! I'd be happy to help you with your questions.
Multiple choice:
To determine the correct answer between options b and c, we need to understand what is included in the amount capitalized in association with the drug patent. Typically, when a company obtains a patent for a drug, the cost of developing the drug and the cost of filing for a patent are both capitalized. This means that the correct answer is option c - "The cost of developing the drug and filing for a patent." This includes both the expenses incurred during the drug development process and the expenses related to obtaining the patent.
True/False:
1. "It is assumed that all property, plant, and equipment will be consumed over time." This statement is False. Property, plant, and equipment are long-term assets, and while they can depreciate or wear out over time, it is not assumed that they will be completely consumed.
2. "An estimate of uncollectible accounts is generally based on the company's historical experience rather than on known uncollectible accounts." This statement is True. When estimating uncollectible accounts, companies often rely on their past experience or historical data to determine the likelihood of customers defaulting on their payments. This estimate helps in estimating the amount of bad debt expense required to be recorded.
3. "Non-current assets include all types of property, plant, and equipment as well as intangible assets without non-current prepaid." This statement is also False. Non-current assets include property, plant, and equipment, as well as other long-term assets like intangible assets (e.g., patents, trademarks) and investments. The mention of "non-current prepaid" seems unclear in this context.
I hope this clarifies your doubts. Let me know if there's anything else I can assist you with!