aeann Company incurred the following costs during the current year: Modification to the formulation of a chemical product. 1,350,000 Trouble-shooting of breakdowns during commercial production. 1,500,000 Design of tools, jigs and dies involving new technology. 1,700,000 Seasonal or other periodic design changes to existing products. 1,850,000 Laboratory research aimed to discovery of new technology. 2,150,000 In the income statement for the current year, what amount should be reported as research and development expense? A. 5,200,000 B. 4,700,000 C. 3,850,000
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Raeann Company incurred the following costs during the current year:
Modification to the formulation of a chemical product. 1,350,000
Trouble-shooting of breakdowns during commercial production. 1,500,000
Design of tools, jigs and dies involving new technology. 1,700,000
Seasonal or other periodic design changes to existing products. 1,850,000
Laboratory research aimed to discovery of new technology. 2,150,000
In the income statement for the current year, what amount should be reported as research and development expense?
A. 5,200,000
B. 4,700,000
C. 3,850,000
D. 3,350,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps