Benz Co. incurred research and development costs in 2024 as follows:Materials used in research and development projectsEquipment acquired that will have alternate future uses in futureresearch and development projectsDepreciation for 2024 on above equipment$ 450,0003,000,000300,000750,000Personnel costs of persons involved in research anddevelopment projectsConsulting fees paid to outsiders for research and developmentprojects300,000Indirect costs reasonably allocable to research and developmentprojects225,000Total $5,025,000Assume economic viability has not been achieved.What amount of research and development costs should be charged to Benz's 2024 incomestatement? $

Step 1: Identify the R&D CostsStep 2: Treatment of Equipment and DepreciationStep 3: Calculate…

Answered: Benz Co. incurred research and…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 29P

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Blossom Co. incurred research and development costs in 2021 as follows: Materials used in research and development projects $ 940000 Equipment acquired that will have alternate future uses in future research and development projects 2900000 Depreciation for 2021 on above equipment 483333 Personnel costs of persons involved in research and development projects 740000 Consulting fees paid to outsiders for research and development projects 290000 Indirect costs reasonably allocable to research and development projects 215000 $5568333 The amount of research and development costs charged to Blossom's 2021 income statement should be ?
Sandhill Co. incurred research and development costs in 2021 as follows: Materials used in research and development projects $ 930000 Equipment acquired that will have alternate future uses in future research and development projects 2800000 Depreciation for 2021 on above equipment 466666 Personnel costs of persons involved in research and development 730000 projects Consulting fees paid to outsiders for research and development projects 280000 Indirect costs reasonably allocable to research and development projects 205000 $5411666 The amount of research and development costs charged to Sandhill's 2021 income statement should be O $2126666. O $1940000. O $4740000. O $2611666.
Heart Company incurred costs in 2022 as follows:Equipment acquired for use in various research and development projects - P900,000Depreciation on the equipment above - 210,000Materials used in R&D - 300,000Compensation costs of personnel in R&D - 400,000Outside consulting fees for R& D work - 200,000 Indirect costs appropriately allocated to R&D - 260,000What is the total amount of research and development that should be reported in Heart Company's 2022 statement of comprehensive income?The answer must be P1,390,000
Hall Co. incurred research and development costs in 2021 as follows: Materials used in research and development projects $950,000 Equipment acquired that will have alternate future uses in future research and development projects 3,000,000 Depreciation for 2021 on above equipment 500,000 Personnel costs of persons involved in research and development projects 750,000 Consulting fees paid to outsiders for research and…
Bennet Co. incurred research and development costs in 2021 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 2021 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 Bennet’s 2021 statement of profit or loss? $Answer
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Ivanhoe Corp. incurred the following costs during 2023 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)Materials consumed in research projectsMaterials consumed in the development of a product committed for manufacturing in the first quarter of 2024Consulting fees paid in the last quarter of 2023 to outsiders for research and development projects, including $4,500 for advice relatPersonnel costs for research and development projectsIndirect costs reasonably allocated to research and development projectsGeneral borrowing costs on the company's line of creditTraining costs for a new customer service software program。 Calculate the amount to be reported as research and development expense by Ivanhoe on its income statement for 2023. Assumethe equipment is purchased at the beginning of the year. Assume the company follows IFRS for fnancial…
During 2020, Mowgli Company incurred the following costs:R&D services performed by Elijah Company for Mowgli P1,500,00R&D costs incurred by Mowgli Company for Elisha Company and reimbursable by Elisha Company 2,400,000Cost incurred in the conceptual formulation of possible process alternative 2,000,000Building cost that will be used as R & D facility, acquired on January 1, 2013, with estimated useful life of 10 years 3,000,000 Design of tools, jigs and moulds 1,300,000Cost of testing prototype and design modifications 900,000In its 2020 profit and loss, what should Mowgli Company report as research and development expense?
Situation II During 2022, Pearl SA constructed and manufactured certain assets and incurred the following borrowing costs in connecti with those activities. Warehouse constructed for Pearl's own use Special-order machine for sale to unrelated customer, produced according to customer's specifications Inventories routinely manufactured, produced on a repetitive basis Borrowing Costs Incurred The total amount of borrowing cost to be capitalized R$ R$28,200 8,460 7,520 All of these assets required an extended period of time for completion. Assuming the effect of borrowing cost capitalization is material, what is the total amount of borrowing cost to be capitalized?
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…
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Situation II During 2025, Larkspur Corporation constructed and manufactured certain assets and incurred the following interest costs in connection with those activities. Factory constructed for Larkspur's own use Inventories routinely manufactured, produced on a repetitive basis Special-order machine for sale to unrelated customer, produced according to customer's specifications Interest Costs Incurred The total amount of interest costs to be capitalized. $ $43,000 7,300 3,300 All of these assets required an extended period of time for completion. Assuming the effect of interest capitalization is material, what is the total amount of interest costs to be capitalized?

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