During 2015, Oriole Company purchased a building site for its proposed research and development laboratory at a cost of $54,000. Construction of the building was started in 2015. The building was completed on December 31, 2016, at a cost of $380,000and was placed in service on January 2, 2017. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value.

Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2017 appears below.