During the current year, Lyle Co. incurred $204,000 of research and development costs in its laboratory to develop a patent that was granted on July 1. Legal fees and other costs associated with registration of the patent totaled $41,000. The estimated useful life of the patent is 10 years. What amount should Lyle capitalize for the patent on July 1?

It will capitalize 245,000 to recognize the patent intangible asset

Explanation:

It will capitalize the entire research adn development cost as well as the fees and registration cost as are part of the incurred cost needed to obtain the patent

Therefore: 204,000 + 41,000 = 245,000

$41,000

Explanation:

According to US GAAP standards and even IFRS rules, research and development costs must be recorded as expenses and cannot be capitalized. This means that the $204,000 spent on research must be recorded as expenses during the current year. Only the legal fess and other registration costs can be capitalized since they were incurred after the R&D process was over.