Problem 5-28 (LO. 4)Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had thefollowing expenses in connection with the project:SalariesMaterialsInsuranceUtilitiesCost of inspection of materials for quality controlPromotion expensesAdvertisingEquipment depreciationCost of market survey+2019$500,000 $600,00090,00070,0008,00011,0006,0008,0007,0006,00011,00018,00020,00014,000015,0008,00020200The new product will be introduced for sale beginning in July 2021. Determine the amount of the deduction for research and experimenexpenditures for 2019, 2020, 2021, and 2022. If necessary, round the annual deduction to the nearest dollar. c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)?Amount of the deduction2022264,400 X2023264,400 X

AMORTIZATION EXPENSES Amortization is an accounting method for spreading out the costs for the use…

Answered: c. How would your answer change if Blue…

c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)? 2023 Amount of the deduction 2022 264,400 X 264,400 X

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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Question

Problem 5-28 (LO. 4)
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:
Salaries
Materials
Insurance
Utilities
Cost of inspection of materials for quality control
Promotion expenses
Advertising
Equipment depreciation
Cost of market survey
+
2019
$500,000 $600,000
90,000
70,000
8,000
11,000
6,000
8,000
7,000
6,000
11,000
18,000
20,000
14,000
0
15,000
8,000
2020
0
The new product will be introduced for sale beginning in July 2021. Determine the amount of the deduction for research and experimen
expenditures for 2019, 2020, 2021, and 2022. If necessary, round the annual deduction to the nearest dollar.

c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)?
Amount of the deduction
2022
264,400 X
2023
264,400 X

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