Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2015. Blue had the following expenses in connection with the project:

	2015	2016
Salaries	$500,000	$600,000
Materials	90,000	70,000
Insurance	8,000	11,000
Utilities	6,000	8,000
Cost of inspection of materials for quality control	7,000	6,000
Promotion expenses	11,000	18,000
Advertising	0	20,000
Equipment depreciation	15,000	14,000
Cost of market survey	$8,000	$0

a. The new product will be introduced for sale beginning in July 2017. Determine the amount of the deduction for research and experimental expenditures for 2015, 2016, and 2017. If an amount is zero, enter 0.

If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be?

	2015	2016	2017
Amount of the deduction	$	$	$

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b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the deduction be? (When required, calculate the monthly expense to the nearest dollar and use in subsequent computations. If an amount is zero, enter 0.)

	2015	2016	2017
Amount of the deduction	$	$	$