5. In 2020, Lalli Corporation incurred R&D costs as follows: Materials and equipment P100,000 Personnel 100,000 Indirect costs 50,000 P250,000 These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be reoouped by December 31, 2024. Required What is the amount of R&D costs expense in 2020?

5. In 2020, Lalli Corporation incurred R&D costs as follows: Materials and equipment P100,000 Personnel 100,000 Indirect costs 50,000 P250,000 These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be reoouped by December 31, 2024. Required What is the amount of R&D costs expense in 2020?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 5MCQ

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In 2020, Lalli Corporation incurred R&D costs as follows: Materials and equipment 100,000Personnel 100,000Indirect costs 50,000 P250,000 These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be recouped by December 31, 2024. RequiredWhat is the amount of R&D costs expense in 2020?
In 2020, Lalli Corporation incurred R&D costs as follows:Materials and equipment P100,000Personnel 100,000Indirect costs 50,000P250,000These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be recouped by December 31, 2024.Required What is the amount of R&D costs expense in 2020? Show the solution step by step
In 2019, Austin Powers Corporation developed a new product that will be marketed in 2020. In connection with the development of this product, the following costs were incurred in 2019: research and development costs $400,000, materials and supplies consumed $60,000, and compensation paid to research consultants $125,000. It is anticipated that these costs will be recovered in 2022. What is the amount of research and development costs that Austin Powers should record in 2019 as a charge to expense?
3. Suppose the estimated costs to complete at the end of 2019 are $80 million instead of $60 million. Determinethe amount of revenue and gross profit or loss to be recognized in 2019 assuming Sanderson recognizes revenue over time according to percentage of completion.
Power Company incurred P3,000,000 (P800,00 in 2019 and P2,200,000 in 2020) to develop a computer software product. P1,000,000 of this amount was expended before technological feasibility was established in early 2020. The product will earn future revenues of P8,000,000 over its 5-year life, as follows: 2020-P2,000,000; 2021-P2,000,000; 2022-P1,600,00; 2023-P1,600,000; and 2024-P800,000.Required:1. What is the amount of development cost that will be capitalized?2. What is the amortization expense based on the expected revenue ratio?
7- Tamra, Inc. began work on a $ 7000,000 contract in 2019 to construct an office building. During 2010, Tamra, Inc. incurred costs of $1,700,00, billed their customers for $1,200,000, and collected $960,000. At December 31,2019, the estimated future costs to complete the project total $3,300,000.Instructions: compute Tamra’s Gross profit to be recognized in 2019?
In 2020, Zeta Construction Corp. began work on a contract for $3,700,000. Other details follow: 2020 Costs incurred during the year $1,800,000 Estimated costs to complete as of December 31 1,200,000 Billings during the year1,650,000 Collections during the year 975,000 Zeta uses the percentage-of-completion method. For calendar 2020, Zeta should report gross profit of?
9. In 2020, ABC Machine Company spent P352,000 on research and development costs for an invention. This invention was patented on January 2, 2021, paying P24,000 for licensing and legal fees to secure it. The patent has a legal life of 17 years and an estimated useful life of 8 years. In January 2025, ABC paid P32,000 for legal fees in a successful defense of the patent. Related to the patent, the expense for the year 2025 is?
In the year 2020, Olive Construction Corporation began its work on a contract for $3,700,000. Other details follow:Costs incurred during the year= $1,800,000Estimated costs to complete as of December 31= 1,200,000Billings during the year=1,650,000Collections during the year= 975,000 It uses the percentage-of-completion method. For calendar 2020, Olive should report gross profit of?
During 2019, Latte Inc., spent P5,000,000 developing its new "Hyperion" software package. Of this amount, P2,200,000 was spent before technological feasibility was established for the product, which is to be marketed to third parties. The package was completed at December 31, 2019. Latte expects a useful life of 8 years for this product with total revenues of P16,000,000. During the first year (2020), Latte realizes revenues of P3,200,000 a. What journal entries should have been prepared by the accountant in 2019 for the foregoing facts? b. Prepare the entry to record amortization at December 31, 2020
8. On October 1, 2021, Loving Company approved a formal plan to sell a business segment. The sale will occur on April 1, 2022. The segment’s revenue and expenses for 2021 were P30,000,000 and P32,000,000, respectively. On December 31, 2021, the carrying amount of the assets of the segment was P10,000,000 and the fair value less costs of disposal was P9,600,000. The income tax rate is 25%. What amount should be reported as income/(loss) from discontinued operation for 2021? A. (2,400,000) B. (2,000,000) C. (1,800,000) D. 0 E. None of them
Bartov Corporation agreed to build a warehouse for $2,500,000. Expected (and actual) costs for the warehouse follow : 2019, $400,000; 2020, $1,000,000; and 2021, $500,000. The company completed the warehouse in 2021. Compare revenues, expenses, and income for each year 2019 through 2021 assuming that Bartov’s performance obligation for the warehouse is fulfilled over time and that the costs incurred provide a close approximation of the value conveyed to the customer.