Billy Dee Co. incurred the following costs during 2021: Significant modification to the formulation of a chemical product $160,000 Trouble-shooting in connection with breakdowns during commercial production 150,000 Cost of exploration of new formulas 200,000 Seasonal or other periodic design changes to existing products 185,000 Laboratory research aimed at discovery of new technology 225,000 Calculate the amount that Billy Dee Co. should report on its income statement for the year ended December 31, 2021 for research and development expense.

Billy Dee Co. incurred the following costs during 2021: Significant modification to the formulation of a chemical product $160,000 Trouble-shooting in connection with breakdowns during commercial production 150,000 Cost of exploration of new formulas 200,000 Seasonal or other periodic design changes to existing products 185,000 Laboratory research aimed at discovery of new technology 225,000 Calculate the amount that Billy Dee Co. should report on its income statement for the year ended December 31, 2021 for research and development expense.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 29P

See similar textbooks

Similar questions

During 2019 , Lina Co. incurred the following costs: Testing in search for process alternatives $ 400,000 Costs of marketing research for new product 250,000 Modification of the formulation of a process 501,000 Research and development services performed by Beck Corp. for Leon 325,000 In Lina's 2019 income statement, research and development expense should be on January 1, 2019 Lina as a Manufacturing Company acquired a patent on a manufacturing process $4,000,000.lt was expected to have a 10 year life and no residual value. It uses straight-line amortization for patents. On December 31, 2021, the recoverable amount of the patent was estimated to be $2,720,000. At what for amount should the patent be carried on the December 31, 2021 balance sheet?
During 2019 , Lina Co. incurred the following costs: Testing in search for process alternatives $ 400,000 Costs of marketing research for new product 250,000 Modification of the formulation of a process 501,000 Research and development services performed by Beck Corp. for Leon 325,000 In Lina's 2019 income statement, research and development expense should be
Mex Inc. incurred the following costs during 2022: Cost of exploration of new formulas $200,000 Laboratory research aimed at discovery of new technology 225,000 Diagnostics for breakdowns during commercial production 150,000 Periodic design changes to existing products 185,000 Significant modification to the formulation of a chemical product 160,000 How much should Mex report as R&D expense for 2022?
10 In 2019, Flor company incurred the following costs: Laboratory research aimed at discovery of new knowledge 240,000 Cost of testing prototype but economic viability not achieved 60,000 Quality control during commercial production 360,000 Construction of research facility having an estimated useful life Of 5 years but no alternative future use 480,000 What is the total amount of research and development expense for the current year?
Cozy Inc. incurred and paid the following costs during the year ended December 31, 2019: Laboratory research aimed at discovery of new knowledge $200,000 Costs of testing prototype and design modifications (economic viability not achieved) 45,000 Quality control during commercial production, including routine testing of products 270,000 Construction of research facilities having an estimated useful life of 6 years but no alternative future use 360,000 The journal entry for the total amount to be classified and expensed as research and development in 2019 should be?
Candalibra Company incurred the following costs during the year ended December 31, 2018: Laboratory research aimed at discovery of new knowledge $300,000 Costs of testing prototype and design modifications (economic viability not achieved) 55,000 Quality control during commercial production, including routine testing of products 210,000 Construction of research facilities having an estimated useful life of 12 years but no alternative future use 440,000 What is the total amount to be classified and expensed as research and development in 2018 under U.S. GAAP? 79
Marlin Corporation incurred the following costs during the year ended December 31, 2024:Routine, on-going efforts to refine, enrich, & improve upon the qualities of an existing product 125,000Design, construction, and testing of pre-production prototypes and models 110,000 Quality control during commercial production including routine testing of products 150,000 Laboratory research aimed at discovery of new knowledge 180,000How much did Marlin Corporation incur in 2024 as research and development cost? a. 235,000 b. 275,000 c. 290,000 d. 330,000
Oakville Corp. incurred the following costs during 2020 in connection with its research and development phase activities: Cost of equipment acquired for use in research and development projects over the next 5 years (straight-line depreciation used) $277,000 Materials consumed in research projects 62,800 Materials consumed in the development of a product committed for manufacturing in the first quarter 2021 31,300 Consulting fees paid in the last quarter of 2020 to outsiders for research and development projects, including $5,000 for advice related to the $31,300 of materials used above 89,100 Personnel costs of persons involved in research and development projects 111,500 Indirect costs reasonably allocated to research and development projects 24,900 General borrowing costs on the company’s line of credit 15,200 Training costs for a new customer service software program 21,800 Calculate the amount to be reported as research and development…
Early in January 2019, Tellco Inc. acquired a new machine and incurred $11,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned net operating income of $89,000 on average total assets of $782,000 for 2019. Assume that the total cost of the new machine will be depreciated over 10 years using the straight-line method. Required: a. Calculate the ROI for Tellco for 2019. b. Calculate the ROI for Tellco for 2019, assuming that the $11,000 had been capitalized and depreciated over 10 years using the straight-line method. (Hint: There is an effect on net operating income and average assets.) c. Given your answers to parts a and b. why would the company want to account for this expenditure as an expense? d. Assuming that the $11,000 is capitalized, what will be the effect on ROI for 2020 and subsequent years, compared to expensing the interest, installation, and overhead costs in 2019? Complete this question by entering your…
On November 15, 2021, Trade Company made payments for the following expenditures: Replacement parts for overhaul of machine 550,000 Labor and overhead in connection with overhaul 140,000 Continuing, frequent and low cost repairs 150,000 Replacement of broken gear of machine 50,000 The overhaul resulted in a significant increase in production. Prepare the journal entry to record the expenditure to be capitalized:
Leon Corporation incurred the following costs in 2021: Acquisition of R&D equipment with a useful life of 4 years in R&D projects P900,000 Cost of making minor modifications to an existing product 140,000 Advertising expense to introduce a new product 700,000 Engineering costs incurred to advance a product to full production stage (economic viability not achieved) 600,000 What amount should Leon record as research & development expense in 2021?
Candalibra Company incurred the following costs during the year ended December 31, 2022: Laboratory research aimed at discovery of new knowledge $300,000 Costs of testing prototype and design modifications (economic viability not achieved) 55,000 Quality control during commercial production, including routine testing of products 210,000 Construction of research facilities having an estimated useful life of 12 years but no alternative future use 440,000 What is the total amount to be classified and expensed as research and development in 2022 under U.S. GAAP? Group of answer choices $265,000 $795,000 $565,000 $1,005,000