Question
12) NXS Semiconductor prepares its financial statements according to International Financial Reporting Standards. The company incurred the following expenditures during 2018 related to the development
12)
NXS Semiconductor prepares its financial statements according to International Financial Reporting Standards. The company incurred the following expenditures during 2018 related to the development of a chip to be used in mobile devices:
| Salaries and wages for basic research | $ | 3,600,000 | |
| Materials used in basic research | 480,000 | ||
| Other costs incurred for basic research | 1,370,000 | ||
| Development costs | 1,950,000 | ||
| Legal and filing fees for a patent for the new technology | 65,000 | ||
The development costs were incurred after NXS established technological and commercial feasibility and after NXS deemed the future economic benefits to be probable. The project was successfully completed, and the new chip was patented near the end of the 2018 fiscal year. Required: 1. Which of the expenditures should NXS expense in its 2018 income statement?
| Total |
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Auditing The Art and Science of Assurance Engagements
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Ingrid B. Splettstoesser
12th Canadian edition
133098230, 978-0132791564, 132791560, 978-0133098235
