Short answer question 1Research Corp., a publicly accountable entity, incurred the following costs in itsresearch and development division:Jan 1 - July 31,Aug 1- Dec. 31,20212021Materials10,00012,000Labour costs15,00032,000Directly attributableoverhead8,00015,000At July 31, 2021, Research Corp. determined that the project was technically feasibleand commercially viable. Research Corp. had sufficient resources and intentions tocomplete the project and was confident that there was demand in the marketplacefor the product. Measurement of amounts allocated above are reliable.Required: How much, if any, of the costs can be capitalized for fiscal 2021?

Development of any article or thing or any project basically took place In two steps Research and…

Answered: Required: How much, if any, of the…

Business

Accounting

Required: How much, if any, of the costs can be capitalized for fiscal 2021?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 14SP

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Q1. Anna Essentials has determined that the Capping Division is a cash generating unit. The entity calculated that the value in use of the division to be P2.750,000. The entity has also determined that the Fair Value Less cost to dispose of the Plant is P1.625,000. The carrying amount of the assets are as follows: Plant - P2.000,000; Machineries - P1,000,000: Inventories - P1.500,000; Goodwill - P500,000. How much is the carrying amount of Machineries after the impairment? Q2. Anna Essentials has determined that the Capping Division is a cash generating unit. The entity calculated that the value in use of the division to be P2,750,000. The entity has also determined that the Fair Value Less cost to dispose of the Plant is P1,625,000. The carrying amount of the assets are as follows: Plant – P2,000,000; Machineries – P1,000,000; Inventories – P1,500,000; Goodwill – P500,000. How much is the carrying amount of Inventories after the impairment? Q3. On January 1, 2019, Army Company…
35.During 2021, King Co. incurred the following costs: Testing in search for process alternatives 720,000 Costs of testing prototype and design modifications 500,000 Modification of the formulation of a process 1,220,000 Research and development services performed by Queen Corp. for King 650,000 In King's 2021 statement of profit or loss, research and development expense should be 1,220,000 1,870,000 2,590,000 3,090,000
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Q3) (Classification Issues—intangibles) Presented below and on the next page is a list of that could be included in the intangible assets section of the statement of financial position. Investment in a subsidiary company. Timberland, Cost of engineering activity required 10 advance the design of product to the manufacturing stage. Cost of searching for applications of new research findings. Costs incurred in the formation of a corporation. Training costs incurred in start-up of new operation. Purchase cost of a franchise. Goodwill generated internally Cost of testing in search for product alternatives. Goodwill acquired in the purchase of a business. Cost of developing a patent (before achieving economic viability). Cost of purchasing a patent from an inventor. Legal costs incurred in securing a patent. Unrecovered costs of a successful legal suit to protect the patent, Cost of conceptual formulation of possible product alternatives. Cost of purchasing a copyright. Development costs…
42. ABC, Inc. works on a P5,250,000 contract in 2022 to construct an office building. During 2022, ABC, Inc. uses the cost to cost method. At December 31, 2022, the balances in certain accounts were: Construction in progress – P1,890,000; accounts receivable – P180,000; and billings on construction in process – P900,000; contract retention – P90,000; mobilization fee – P70,000. At December 31,2022, the estimated costs to completion are P2,352,000. How much is the realized gross profit in 2022?
______21. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use. ____ 22. An estimate of the amount which an asset can be sold at the end of its useful life is called residual value. ____ 23. Federal unemployment taxes are paid by the employer and the employee. ____ 24. When minor errors occur in the estimates used in the determination of depreciation, the amounts recorded for depreciation expense in the past should be corrected. ____ 25. Residual value is not relevant when calculating the annual depreciation expense using the double declining-balance method (do not consider the calculation for the final year). True and False questions
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