Question
Identifying Research and Development Costs Diaz Company incurred the following costs during the year 2020. 1. Salaries expense related to design for a trademark with
Identifying Research and Development Costs
Diaz Company incurred the following costs during the year 2020.
| 1. | Salaries expense related to design for a trademark with an indefinite estimated life | $3,600 |
| 2. | Materials used for research and development projects for the current year | 6,000 |
| 3. | Fees paid to external consultants related to research and development projects | 18,000 |
| 4. | Trouble-shooting in connection with breakdowns during production | 10,800 |
| 5. | Design of tooling involving new technology | 5,400 |
| 6. | Cost of equipment (purchased January 2019) that will have alternative uses over 6 years | 48,000 |
| 7. | Salaries expense related to updates to an existing product | 24,000 |
| 8. | Allocation of rent expense for a facility partially used for research and development activities | 9,000 |
| 9. | Routine testing of product during commercial production | 16,800 |
Determine the amount of research and development costs that would be disclosed in the financial statements of Diaz company for the year 2020.
Note: Round your answer to the nearest whole dollar.
| Research and development expense |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
