In 2018, Starsearch Corporation began work on three research and development projects. One of the projects was
Question:
Salaries and wages for:
Lab research ...................................................................... $300,000
Design and construction of preproduction prototype ...................... 160,000
Quality control during commercial production ............................. 20,000
Materials and supplies consumed for:
Lab research ..................................................................... 60,000
Construction of preproduction prototype .................................... 30,000
Purchase of equipment ........................................................... 600,000
Patent filing and legal fees for completed project ........................... 40,000
Payments to others for research .................................................. 120,000
Total.................................................................................$1,330,000
$200,000 of equipment was purchased solely for use in one of the projects. After the project is completed, the equipment will be abandoned. The remaining $400,000 in equipment will be used on future R&D projects. The useful life of equipment is five years. Assume that all of the equipment was acquired at the beginning of the year.
Required:
Prepare journal entries, reclassifying amounts in R&D expense, to reflect the appropriate treatment of the expenditures.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Question Posted: