Outspoken Company made the following expenditures relating to Product Y. Legal costs to file a patent on Product Y. Production of the finished product would not have been undertaken without the patent Special equipment to be used solely for development of Product Y. The equipment has no other use and has an estimated useful life of four years. Labor and material costs incurred in producing a prototype Cost of testing the prototype - 100,000 600,000 2,000,000 800,000 What total amount should be expensed when incurred? a. 2,800,000 b. 2,950,000 c. 3,400,000 d. 3,500,000

Outspoken Company made the following expenditures relating to Product Y. Legal costs to file a patent on Product Y. Production of the finished product would not have been undertaken without the patent Special equipment to be used solely for development of Product Y. The equipment has no other use and has an estimated useful life of four years. Labor and material costs incurred in producing a prototype Cost of testing the prototype - 100,000 600,000 2,000,000 800,000 What total amount should be expensed when incurred? a. 2,800,000 b. 2,950,000 c. 3,400,000 d. 3,500,000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.2.2P: Differential analysis report for machine replacement proposal Catalina Tooling Company is...

See similar textbooks

Similar questions

Differential analysis report for machine replacement proposal Catalina Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Annual nonmanufacturing operating expenses and revenue are not expected to be affected by the purchase of the new machine. Instructions List other factors that should be considered before a final decision is reached.
. Squarepants company made the following expenditures relating to product Y.Legal costs to file a patent on Product Y. Production of the finishedProduct would not have been undertaken without the patent 75,000Special equipment to be used solely for the development of Product YThe equipment has no other use and has an estimated useful life of 4 yrs 450,000Labor and materials costs incurred in producing a prototype 1,500,000Cost of testing the prototype 600,000 What total amount should be expensed when incurred?
Immortality Co. made the following expenditures relating to a newly invented product Legal and registration costs related to a patent on the product 120,000Special equipment used solely on R&D activities for the newly invented product 720,000Depreciation on the special equipment above 180,000Labor and material costs incurred in producing a prototype model 2,400,000Cost of testing the prototype 960,000 Required:What is the total amount of costs that will be expensed when incurred?
1. During the current year, Dangerous company incurred the following costs:Research and development services performed by anotherentity for Luminous 300,000Design, construction and testing of preproduction prototypeAnd model 400,000Testing in search for new product or process alternative 350,000 What total amount should be reported as research and development expense in thecurrent year?
Candalibra Company incurred the following costs during the year ended December 31, 2022: Laboratory research aimed at discovery of new knowledge $300,000 Costs of testing prototype and design modifications (economic viability not achieved) 55,000 Quality control during commercial production, including routine testing of products 210,000 Construction of research facilities having an estimated useful life of 12 years but no alternative future use 440,000 What is the total amount to be classified and expensed as research and development in 2022 under U.S. GAAP? Group of answer choices $265,000 $795,000 $565,000 $1,005,000
Marlin Corporation incurred the following costs during the year ended December 31, 2024:Routine, on-going efforts to refine, enrich, & improve upon the qualities of an existing product 125,000Design, construction, and testing of pre-production prototypes and models 110,000 Quality control during commercial production including routine testing of products 150,000 Laboratory research aimed at discovery of new knowledge 180,000How much did Marlin Corporation incur in 2024 as research and development cost? a. 235,000 b. 275,000 c. 290,000 d. 330,000
During 2021, Sheridan Co. incurred the following costs: Testing in search for process alternatives $373000 Costs of marketing research for new product 243000 Modification of the formulation of a process 553000 Research and development services performed by Sunland Corp. for Sheridan 468000 In Sheridan's 2021 income statement, research and development expense should be $1021000. $1637000. $553000. $1394000.
. Milby company incurred the following research and development costs during the current year: Equipment purchased for current and future projects 150,000Equipment purchased for current project only 300,000Research and development salaries of current project 600,000Legal fees to obtain patent 75,000 Material and labor costs for prototype product 900,000 The equipment has a five-year useful life and is depreciated using the straight line method. What total amount should be recognized as research and development expense for current year?
Loazia Inc. incurred the following costs during the year ended December 31, 2013: Laboratory research aimed at discovery of new knowledge $230,000 Costs of testing prototype and design modifications $45,000 Quality control during commercial production, including routine testing of products $270,000 Construction of research facilities having an estimated useful life of 6 years but no alternative future use $360,000 The total amount to be classified and expensed as research and development in 2013 is ____________.
Cozy Inc. incurred and paid the following costs during the year ended December 31, 2021: Laboratory research aimed at discovery of new knowledge $200,000 Costs of testing prototype and design modifications (economic viability not achieved) 45,000 Quality control during commercial production, including routine testing of products 270,000 Construction of research facilities having an estimated useful life of 6 years but no alternative future use 360,000 The journal entry for the total amount to be classified and expensed as research and development in 2021 is:
Blossom Co. incurred research and development costs in 2021 as follows: Materials used in research and development projects $ 940000 Equipment acquired that will have alternate future uses in future research and development projects 2900000 Depreciation for 2021 on above equipment 483333 Personnel costs of persons involved in research and development projects 740000 Consulting fees paid to outsiders for research and development projects 290000 Indirect costs reasonably allocable to research and development projects 215000 $5568333 The amount of research and development costs charged to Blossom's 2021 income statement should be ?
During its first year of operation, Dovery Company incurred $355,000 of research costs undertaken with the prospect of gaining new technical understanding about a new nanotechnology procedure. An additional $495,000 was incurred to develop a production process to use that new technology to produce a new lubricant product. Under U.S. GAAP, which of the following is the appropriate accounting for these costs? Group of answer choices expense $355,000 and capitalize $495,000 as an intangible asset capitalize $850,000 as an intangible asset expense $850,000 expense $495,000 and capitalize $355,000 as an intangible asset