69. Lovely Company is an entity that provides engineering operational support services to aircraft manufacturers. The entity received a confirmed order from an aircraft manufacturer to develop a anew design for ducting the air conditioning of an aircraft. The entity incurred the following expenditures in the current year in pursuance of a project for the air conditioner duct: Salaries of engineers, consultants and technicians Cost of developing the duct and producing the test model Additional cost for revising the ducting process to ensure that product could be introduced in the market 420,000 580,000 630,000 Cost of developing the first model or prototype and testing 110,000 Equipment with a useful life of five years (being used in the current project but may use in other projects) 1,500,000 Construction of a facility for the project (no alternative future use) 600,000 Cost of conference for the introduction of this new project 170,000 it with air conditioners to ensure comparability What amount should be reported as research and development expense for the current year