Problem 7-39 (LO. 5)

Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2022. Blue had the following expenditures in connection with the project, all incurred in the U.S.:

	2022	2023
Salaries	$500,000	$600,000
Materials	90,000	70,000
Insurance	8,000	11,000
Utilities	6,000	8,000
Cost of inspection of materials for quality control	7,000	6,000
Promotion expenses	11,000	18,000
Advertising	0	20,000
Equipment depreciation	15,000	14,000
Cost of market survey	8,000	0

Question Content Area

The new product will be introduced for sale beginning in April 2024.

If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations.

a. Determine Blue Corporations research and experimental expenditures for 2022 and 2023.

	2022	2023
Amount of the deduction	619000	703000

Question Content Area

b. Determine Blue Corporations deduction for research and experimental expenditures for 2022 and 2023.

	2022	2023
Amount of the deduction	????	????