Giants Co identified the following research & development costs associated with projects being worked on during 2023: BUILDINGS: a purchased 3/1/16 for use as an R&D facility CONTRACT WORK: b Other companies were contracted to assist Giants Co's R&D projects $3,410,000 $47,500
Giants Co identified the following research & development costs associated with projects being worked on during 2023: BUILDINGS: a purchased 3/1/16 for use as an R&D facility CONTRACT WORK: b Other companies were contracted to assist Giants Co's R&D projects $3,410,000 $47,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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1) Determine the amount of R&D Expense to be reported FYE 12/31/23.
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![5.
Giants Co identified the following research & development costs associated with projects being worked on during 2023:
BUILDINGS:
a purchased 3/1/16 for use as an R&D facility
CONTRACT WORK:
b Other companies were contracted to assist in Giants Co's R&D projects
C Performed R&D work for other companies on a contract basis
EQUIPMENT/MACHINES:
Equipment purchased on 7/1/21 for current R&D projects only.
Equipment purchased on 1/1/23 for current and future R&D projects.
f Machine purchased on 9/1/20 for current and future R&D projects.
IN-HOUSE COSTS:
Salaries of R&D personnel
Total indirect costs, of which only [35%] are reasonably allocable to R&D projects
MATERIALS:
Materials (type A) purchased during 2022 for current R&D projects only. These projects are still in progress.
Total materials used during 2022 was $46,200, and 2023 was $37,500.
1
Materials (type B) purchased during 2022 for current and future R&D projects. These projects are still in progress.
Total materials used during 2022 was $66,100 and 2023 was $51,700.
Materials (type C) purchased during 2023 for current R&D projects only. These projects are still in progress.
Total materials used during 2023 was $82,600.
Materials (type D) purchased during 2023 for current and future R&D projects. These projects are still in progress.
Total materials used during 2023 was $92,100.
PATENTS:
m Purchased patent (grant date = 11/1/16) on 11/1/20 for current and future R&D projects.
n
Purchased patent (grant date = 4/1/22) on 4/1/22 for current R&D projects only.
0 o
Purchased patent (grant date = 3/1/21) on 3/1/23 for current R&D projects only.
All assets subject to depreciation use the straight-line method, with salvage value determined as a % of cost.
. Buildings use a 10% salvage value and a 30-year life
. Machines/Equipment use a 20% salvage value and a 12-year life
All Intangibles have a 15-year economic life.
$3,410,000
$47,500
$34,900
$321,000
$423,000
$582,000
$396,100
$176,000
$101,800
$132,400
$143,900
$155,300
$246,000
$321,000
$102,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe0037993-fc06-4e9a-b4ca-eff80ad003fe%2F72d6e59e-181a-450f-9027-e8bf392de41b%2Fgll288a_processed.png&w=3840&q=75)
Transcribed Image Text:5.
Giants Co identified the following research & development costs associated with projects being worked on during 2023:
BUILDINGS:
a purchased 3/1/16 for use as an R&D facility
CONTRACT WORK:
b Other companies were contracted to assist in Giants Co's R&D projects
C Performed R&D work for other companies on a contract basis
EQUIPMENT/MACHINES:
Equipment purchased on 7/1/21 for current R&D projects only.
Equipment purchased on 1/1/23 for current and future R&D projects.
f Machine purchased on 9/1/20 for current and future R&D projects.
IN-HOUSE COSTS:
Salaries of R&D personnel
Total indirect costs, of which only [35%] are reasonably allocable to R&D projects
MATERIALS:
Materials (type A) purchased during 2022 for current R&D projects only. These projects are still in progress.
Total materials used during 2022 was $46,200, and 2023 was $37,500.
1
Materials (type B) purchased during 2022 for current and future R&D projects. These projects are still in progress.
Total materials used during 2022 was $66,100 and 2023 was $51,700.
Materials (type C) purchased during 2023 for current R&D projects only. These projects are still in progress.
Total materials used during 2023 was $82,600.
Materials (type D) purchased during 2023 for current and future R&D projects. These projects are still in progress.
Total materials used during 2023 was $92,100.
PATENTS:
m Purchased patent (grant date = 11/1/16) on 11/1/20 for current and future R&D projects.
n
Purchased patent (grant date = 4/1/22) on 4/1/22 for current R&D projects only.
0 o
Purchased patent (grant date = 3/1/21) on 3/1/23 for current R&D projects only.
All assets subject to depreciation use the straight-line method, with salvage value determined as a % of cost.
. Buildings use a 10% salvage value and a 30-year life
. Machines/Equipment use a 20% salvage value and a 12-year life
All Intangibles have a 15-year economic life.
$3,410,000
$47,500
$34,900
$321,000
$423,000
$582,000
$396,100
$176,000
$101,800
$132,400
$143,900
$155,300
$246,000
$321,000
$102,000
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