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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Notting Hill Company incurred the following costs for R&D activities:

Chapter 12, Problem 3RE, Notting Hill Company incurred the following costs for RD activities: Prepare Notting Hills journal

Prepare Notting Hill’s journal entry(ies) to record its R&D.

To determine

Prepare journal entry to record research and development cost of company N.

Explanation

Research and development costs: It refers to the expenditures spent on research, development, improvement or introduction of new products, processes, a new patent or even a copyright, that a company expects to get benefits. It is reported under the intangible asset in the balance sheet.

Prepare journal entry to record the research and development costs of Company K:

DateAccounting Title and ExplanationPost Ref.Debit ($)Credit ($)
 Research and development Expense 148,500 
 Cash   123,500
 Inventory 

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