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23 January, 22:54

A company incurred the follow costs related to research and development for the current year:

Technology development (salaries and supplies) $ 320,000

Engineering work performed by another company 150,000

Purchase of equipment 750,000

Testing new models 60,000

Legal fees for patent application 30,000

The equipment will be used in other projects. Depreciation in the current year is $90,000. For what amount should the company report research and development expense?

A: $500,000

B: $620,000

C: $650,000

D: $470,000

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Answers (1)
  1. 24 January, 01:14
    0
    B: $620,000

    Explanation:

    The computation of amount that company should report research and development expense is shown below:-

    Amount that company should report = Technology development (salaries and supplies) + Engineering work performed by another company + Testing new models + Depreciation in the current year

    = $320,000 + $150,000 + $60,000 + $90,000

    = $620,000

    Therefore for computing the amount that company should report we simply applied the above formula and rest value we have not considered as they are not relevant to compute the amount that company should report
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