Ethics Case 10-8 (Static) Research and development LO10-8 Mayer Biotechnical, Incorporated, develops, manufactures, and sells pharmaceuticals. Significant research and development (R&D) expenditures are made for the development of new drugs and the improvement of existing drugs. During 2024, $220 million was spent on R&D. Of this amount, $30 million was spent on the purchase of equipment to be used in a research project involving the development of a new antibiotic. The equipment likely will be used on only this one project. The company president has asked the controller to make every effort to increase 2024 earnings because in 2025 the company will be seeking significant new financing from both debt and equity sources. "I guess we might use the equipment in other projects later," the controller wondered. Required: 1. Assuming that the equipment was purchased at the beginning of 2024, how much should the controller record for research and development expense in 2024? Note: Enter your answer in millions and not in dollars. 2. What amount would be reported for research and development expense in 2024 under the controller's alternative assumption that the equipment will be used for other projects evenly over five years? Note: Enter your answer in millions and not in dollars. 3. Does the need for financing justify the controller making the alternative assumption in requirement 2? 1.2024 Research & Development expense related to the equipment 2. Research and development expense in 2024 under the controller's alternative assumption. $ 220 million $ 214 million 3. Does the need for financing justify the controller making the alternative assumption in requirement 27 No