Abbott laboratories reports the following income statement ( in partial form )

net sale [20,247] / cost of products sold [9,218] / amortization of intingable assets [555] / research and developement [1,345] / selling general and administrative [6,530]

total operating cost and expense [17,648] / operating earnings [2,599]

1) compute the percent of net sales that Abbott laboratories spend on research and development (R&D). How would you assess the appropriateness of its R&D expense level ?

2) Using the financial statement effects template, describes how the accounting for R&D expenseditures affects Abbott laboratories balance sheet and income statement.