Armando Corporation incurred the following expenses:20222023Salaries515,000614,000Materials90,00070,000Insurance and utilities14,00019,000Promotion expense11,00018,000Advertising-0-20,000Cost of market survey8,000-0-The new product will be available for sale July 1, 2024. The company would like to capitalize and amortize the expenditures.Calculate the amount of research and experimental expenditures for:a. 2022b. 2023Calculate the deduction for R&D expenses for:C. 2022d. 2023e. 2024If the answer is 0, just type a 0. Use commas as appropriate, ie 55,000. Round answers to the nearest dollar.

The objective of the question is to calculate the amount of research and experimental expenditures…

Answered: Armando Corporation incurred the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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JRE2 Incorporated entered into a contract to install a pipeline for a fixed price of $2,275,000. JRE 2 recognizes revenue upon contract completion. Cost incurred Estimated Cost to Complete 2023 $ 260,000 $ 1,600,000 2024 1,650,000 550,000 2025 500,000 0 In 2024, JRE2 would report gross profit (loss) of: Multiple Choice $(320,000). $(235,000). $(185,000). So.
Virtual Co. incurred research and development costs in 2023 as follows: Materials used in research and development projects $ 450,000 Equipment acquired that will have alternate future uses in future research and development projects 3,000,000 Depreciation for 2023 on above equipment 300,000 Personnel costs of persons involved in research and development projects 750,000 Consulting fees paid to outsiders for research and development projects 300,000 Indirect costs reasonably allocable to research and development projects 225,000 Total $5,025,000 Assume economic viability has not been achieved. What amount of research and development costs should be charged to Virtual’s 2023 income statement?
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Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the next five years totaling $600,000. When is the cost of the research and development in 2021 recognized as an expense? Multiple Choice Evenly over the period 2022-2026. Full amount in 2026. Evenly over the period 2021-2025. Full amount in 2021.
Virtual Co. incurred research and development costs in 2023 as follows: Materials used in research and development projects $ 450,000 Equipment acquired that will have alternate future uses in future research and development projects 3,000,000 Depreciation for 2023 on above equipment 300,000 Personnel costs of persons involved in research and development projects 750,000 Consulting fees paid to outsiders for research and development projects 300,000 Indirect costs reasonably allocable to research and development projects 225,000 Total $5,025,000 Assume economic viability has not been achieved. What amount of research and development costs should be charged to Virtual’s 2023 income statement
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2. Early in 2022, Erin Corporation engaged Mikell, Inc. to design and construct a complete modernization of Erin's manufacturing facility. Construction was begun on May 1, 2022 and was completed on December 31, 2022. Erin made the following payments to Mikell, Inc. during 2022: May 1 $3,000,000 September 1 4,400,000 December 1 2,200,000 In order to help finance the construction, Erin issued $1,500,000 of 10-year, 5% bonds payable, issued at par on April 30, 2022, with interest payable annually on April 30. In addition, Erin had a $3,500,000, 6% note payable dated January 1, 2005 and due January 1, 2024, with interest payable annually on January 1 and a $1,000,000, 4% note payable dated July 1, 2009 and due June 30, 2023, with interest payable annually on June 30. Required: a. Calculate the weighted-average accumulated expenditures. b. Calculate avoidable interest. c. Calculate total amount of interest to be capitalized during 2022.
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Hypothetical Corporation incurred the following expenses: 2019 2020Research and Development 619,000 703,000 The new product will be available for sale July 1, 2021. Calculate the deduction for R&D expenses for 2019, 2020, and 2021 under the following independent assumptions:a. Armando Corporation elects to expense the R&D expenses. b. Armando Corporation elects to amortize the R&D expenses over 60 months.

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