Dax Pharmaceuticals incurred the following costs in year 1 related to a new cancer drug: Research for new formulas Development of a new formula Legal and filing fees for a patent for the new formula Total $3,475,000 2,800,000 80,000 $6,355,000 The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new drug was patented before the end of year 1 fiscal year. Required: 1. Calculate the amount of research and development expense Dax should report in its year 1 income statement related to this project. 2. Repeat requirement 1 assuming that Dax prepares its financial statements according to International Financial Reporting Standards