Question:

On its annual income statement, Star Laboratories reported research and development expense of $1,564,200,000. Which of the following statements must be true? Select one:

a. Star Laboratories spent $1,564,200,000 in cash to develop new products and improve old products.

b. Research and development expense reduced Star Laboratories annual net income by $1,564,200,000.

c. Star Laboratories capitalized at least $1,564,200,000 of research and development costs for the year.

d. The $1,564,200,000 included amortized research and development costs from prior years that were not previously expensed, because Star Laboratories incurs such expenses each year.

e. None of these are correct.