**Question:**How should NSB, Inc. report significant research and development costs incurred?**Options:**A. Expense all costs in the year incurred. B. Capitalize the costs and amortize over a five-year period. C. Capitalize the costs and amortize over a 40-year period. D. Expense all costs two years before and five years after the year incurred.**Answers Provided:**- ○ C- ○ A- ○ D- ○ BThe question asks about the appropriate accounting treatment of significant research and development costs for NSB, Inc. The options include both expensing and capitalizing approaches, with varying periods for amortization. During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $1,800,000, of which 40% occurred after the technological feasibility of the product had been established. The product was completed and offered for sale on January 1, 2021. During 2021, revenues from sales of the product totaled $3,000,000. The package is expected to be successfully marketable for five years, and the total revenues over the life of the product are estimated to be $10,000,000.At December 31, 2021, the carrying value of the software intangible asset is:- $864,000- $504,000- $1,080,000- $720,000

Solution;- Introduction:- Research and development costs are the costs incurred in a planned search…

Answered: How should NSB, Inc. report significant…

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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Required: State the effect (higher, lower, no effect) of accelerated depreciation relative to straight-line depreciation on a. Depreciation expense in the first year. b. The asset's net book value after two years. Cash flows from operations (excluding income taxes). с.
The Allowable Business Investment Loss is __________ of the realized Business Investment Loss in a given year. Question 2 options: a) Same amount b) One-third c) One-half d) One-fifth
The following schedule reflects the incremental costs and revenues for acapital project. The company uses straight-line depreciation. The interestexpense reflects an allocation of interest on the amount of this investment,based on the company’s weighted average cost capital:Revenues $650,000Direct costs $270,000Variable overhead 50,000Fixed overhead 20,000Depreciation 70,000General & administrative 40,000Interest expense 8,000458,000Net profit before taxes $192,000══════The annual cash flow from this investment, before tax considerations, would be:
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A project requires an investment of $800 in a fixed asset that is classified as a five-year asset under MACRS. The project will have a three-year life. Find the depreciation for year three.
A two-year project has an initial requirement of $500,000 for fixed assets and $100,000 for net working capital. The fixed assets will be depreciated using MACRS and the fixed asset falls into the three-year MACRS class. Depreciation rates for years 1 and 2 are 0.3333 and 0.4445. The estimated salvage value is $120,000. All of the net working capital will be recouped at the end of the 2 years. Management estimates that sales revenues less costs will be $700,000 per year for years 1 and 2. The discount rate is 9 percent and tax rate is 35 percent. What is the initial investment for this project? $513,327.50 ○ $600,000 $1,300,000 $500,000
Improvement of the production line resulting in an increase in productivity, $32,100 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?
This depreciation method assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year. Declining balance method O Sraight line method Sum-of-years digit method Sinking fund formula method
The value of your investment is divided into $30,000 for the land and $120,000 for the office space. Assume the salvage value of your investment is $40,000 at the end of seventh year. Using CCA=1%, compute the undepreciated capital cost of the office space for year four. a) Between $114,000 and $117,000 b) Between $120,000 and $123,000 c) Between $95,000 and $98,000 O d) Between $110,000 and $113,000 e) None of the answers are correct f) Between $92,000 and $95,000

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