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Problem 1 0 - 1 1 ( Static ) Research and development [ LO 1 0 - 8 ] In 2 0 2 4 ,
Problem Static Research and development LO
In Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company's fiscal yearend is December All of the following expenditures were included in the R&D expense account:
Salaries and wages for:
Lab research $
Design and construction of preproduction prototype
Quality control during commercial production
Materials and supplies consumed for:
Lab research
Construction of preproduction prototype
Purchase of equipment
Patent filing and legal fees for completed project
Payments to others for research
Total $
A total of $ of equipment was purchased solely for use in one of the projects. After the project is completed, the equipment will be abandoned. The remaining $ in equipment will be used on future R&D projects. The useful life of equipment is five years. Assume that all of the equipment was acquired at the beginning of the year.
Required:
Prepare journal entries, reclassifying amounts in R&D expense, to reflect the appropriate treatment of the expenditures.
Record depreciation on equipment used in R&D project
debit: research and development expense
credit accumulated depreciation
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