Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the following expenses in connection with the project: 2019 2020 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 Question Content Area The new product will be introduced for sale beginning in April 2021. Determine the amount of the deduction for research and experimental expenditures for 2019, 2020, 2021, and 2022. If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations. a. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 2019 2020 2021 and 2022 Amount of the deduction $fill in the blank 723c960be066ff2_1 $fill in the blank 723c960be066ff2_2 $fill in the blank 723c960be066ff2_3 Question Content Area b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the deduction be? 2019 2020 2021 2022 Amount of the deduction $fill in the blank 3f6a81fb9062032_1 $fill in the blank 3f6a81fb9062032_2 $fill in the blank 3f6a81fb9062032_3 $fill in the blank 3f6a81fb9062032_4 Question Content Area c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)? 2022 2023 Amount of the deduction $fill in the blank aceef20c3fe1fbd_1 $fill in the blank aceef20c3fe1fbd_2
Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the following expenses in connection with the project: 2019 2020 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 Question Content Area The new product will be introduced for sale beginning in April 2021. Determine the amount of the deduction for research and experimental expenditures for 2019, 2020, 2021, and 2022. If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations. a. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 2019 2020 2021 and 2022 Amount of the deduction $fill in the blank 723c960be066ff2_1 $fill in the blank 723c960be066ff2_2 $fill in the blank 723c960be066ff2_3 Question Content Area b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the deduction be? 2019 2020 2021 2022 Amount of the deduction $fill in the blank 3f6a81fb9062032_1 $fill in the blank 3f6a81fb9062032_2 $fill in the blank 3f6a81fb9062032_3 $fill in the blank 3f6a81fb9062032_4 Question Content Area c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)? 2022 2023 Amount of the deduction $fill in the blank aceef20c3fe1fbd_1 $fill in the blank aceef20c3fe1fbd_2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the following expenses in connection with the project:
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Question Content Area
The new product will be introduced for sale beginning in April 2021. Determine the amount of the deduction for research and experimental expenditures for 2019, 2020, 2021, and 2022.
If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations.
a. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be?
|
Question Content Area
b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the deduction be?
|
Question Content Area
c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)?
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