cooke company acquires patent rights from other enterprises and pays advance royalti 603328
Cooke Company acquires patent rights from other enterprises and pays advance royalties in some cases, and in others, royalties are paid within ninety days after year-end. The following data are included in Cooke’s December 31 balance sheets:
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|
2005 |
2006 |
|
|
Prepaid royalties |
$55,000 |
$45,000 |
|
Royalties payable |
80,000 |
75,000 |
During 2006 Cooke remitted royalties of $300,000. In its income statement for the year ended December 31, 2006, Cooke should report royalty expense of
- $295,000
- $305,000
- $310,000
- $330,000