5 Plaza Corp is a public company that was involved in research and development of two drugs in 20X2: a cancer drug, and a new anesthetic. The anesthetic has passed the six criteria for capitalization. The following research and development costs were incurred in 20X2: Cost of equipment purchased for research activities (purchased at beginning of the year; expected useful life of 10 years; negligible residual value $100,000 BUS385 Lab 5 (Spring 2022) Materials used in researching a new cancer drug $63,000 Materials used in the development phase of a new anesthetic drug $30,000 Consulting fees paid to external consultants for research and development projects $680,000 ($50,000 relates to feasibility studies for the development stage) Direct labour costs (2/3 relate to research; 1/3 to development) $1,200,000 Indirect costs reasonably allocated to research activities $34,000 General borrowing costs on the company's line of credit $15,000 Interest charged on debt used exclusively to fund product development $21,000 Training costs for employees to develop product $8,000 Advertising of new product in development $12,000 Required: (1) Calculate the amount to be reported as R&D expense for the year ended December 31, 20x2 related to the research and development costs. Assume Plaza uses the straight-line method of depreciation. (2) What amount would be capitalized and how would this amount be presented on the company's Statement of Financial Position