Assessing Research and Development Expenses Abbott Laboratories reports the following income statement, in partial form ($ millions): Year ended December 31 2014 Net sales $20,247 Cost of products sold 9,218 Amortization of intangible assets 555 Research and development 1,345 Selling, general and administrative Total operating cost and expenses 17,648 Operating earnings $2,599 * including acquired in-process and collaborations R&D 6,530 a. Compute the percent of net sales that Abbott Laboratories spends on research and development (R&D). Round answer to one decimal place (i.e., 0.1426 = 14.3%) 6.6 % b. Using the financial statement effects template, describe how the accounting for R&D expenditures affects Abbott Laboratories' balance sheet and income statement. Enter answers in millions, as shown above. Use negative signs with answers, when appropriate. Transaction Cash Asset + Noncash Assets Contra Assets = Liabilities + Contr. Capital + Earned Capital Revenue Expenses Net income R & D expenditures 1,336 x 0 0 0 1,336 x 1,336 x (1,336) X 0 0