INTERMEDIATE ACCOUNTING-LL W/CONNECT
10th Edition
ISBN: 9781264009206
Author: SPICELAND
Publisher: MCG
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Chapter 10, Problem 10.16BE
Research and development
• LO10–8
Maxtor Technology incurred the following costs during the year related to the creation of a new type of personal computer monitor:
| Salaries | $220,000 |
| 125,000 | |
| Utilities and other direct costs incurred for the R&D facilities | 66,000 |
| Patent filing and related legal costs | 22,000 |
| Payment to another company for performing a portion of the development work | 120,000 |
| Costs of adapting the new monitor for the specific needs of a customer | 80,000 |
What amount should Maxtor report as research and development expense in its income statement?
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b.
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Exercise 10-26 (Algo) Research and development [LO10-8]
In 2021, Space Technology Company modified its model Z2 satellite to incorporate a new communication device. The company made
the following expenditures:
Basic research to develop the technology
Engineering design work
Development of a prototype device
Acquisition of equipment
Testing and modification of the prototype
Legal and other fees for patent application on the new communication system
Legal fees for successful defense of the new patent
Total
The equipment will be used on this and other research projects. Depreciation on the equipment for 2021 is $30,000.
During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all of the above as
costs of the patent. Management contends that the device simply represents an improvement of the existing communication system of
the satellite and, therefore, should be capitalized.
Required:
Prepare correcting entries that reflect the…
Brief Exercise 11-13 (Algo) Amortization; Software development costs [LO11-4]
On September 30, 2024, Athens Software began developing a software program to shield personal computers from
malware and spyware. Technological feasibility was established on February 28, 2025, and the program was available
for release on April 30, 2025. Development costs were incurred as follows:
$
September 30 through December
31, 2024
January 1 through February 28,
2025
March 1 through April 30, 2025
Athens expects a useful life of four years for the software and total revenues of $7,600,000 during that time. During
2025, revenue of $1,520,000 was recognized.
Required:
1. Prepare a journal entry to record the development costs in each year of 2024 and 2025.
2. Calculate the required amortization for 2025.
Complete this question by entering your answers in the tabs below.
Required Required
1
2
Prepare a journal entry to record the development costs in each year of 2024 and 2025.
Note: If no entry is…
Chapter 10 Solutions
INTERMEDIATE ACCOUNTING-LL W/CONNECT
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Prob. 10.8BECh. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.18BECh. 10 - Prob. 10.19BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.21BECh. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31ECh. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.1PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6DMPCh. 10 - Prob. 10.7DMPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9DMPCh. 10 - Prob. 10.11DMPCh. 10 - Prob. 10.13DMPCh. 10 - Prob. 10.15DMPCh. 10 - Prob. 10.16DMP
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