During 2002, Delta Inc. incurred research and development costs as follows:

Experimental and development costs of a new

process patented in December 2002 P250,000

Testing for evaluation of prototypes300,000

Modification of the formulation of a chemical

product150,000

Research and development costs reimbursable

under a contract with Quality Chemicals

Corporation500,000

What amount should Delta report as research and development expense in its income statement for the year ended December 31, 2002?

(a) P 0 (b) P450,000 (c) P700,000 (d) P950,000