FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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Transcribed Image Text: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.: \table[[, 2022, 2023
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
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 Corporation's research and experimental expenditures for 2022 and 2023.
Amount of the deduction
2022
619,000
2023
703,000✓
b. Determine Blue Corporation's deduction for research and experimental expenditures for 2022 and 2023.
Amount of the deduction
2022
2023
123,800 X
139,000 X
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