Janson Pharmaceuticals incurred the following costs in 2018 related to a new cancer drug:Research for new formulas $2,425,000Development of a new formula 1,600,000Legal and filing fees for a patent for the new formula 60,000Total $4,085,000The development costs were incurred after technological and commercial feasibility was established and afterthe future economic benefits were deemed probable. The project was successfully completed and the new drugwas patented before the end of the 2018 fiscal year.Required:1. Calculate the amount of research and development expense Janson should report in its 2018 income statementrelated to this project.2. Repeat requirement 1 assuming that Janson prepares its financial statements according to International Financial Reporting Standards.
Janson Pharmaceuticals incurred the following costs in 2018 related to a new cancer drug:
Research for new formulas $2,425,000
Development of a new formula 1,600,000
Legal and filing fees for a patent for the new formula 60,000
Total $4,085,000
The development costs were incurred after technological and commercial feasibility was established and after
the future economic benefits were deemed probable. The project was successfully completed and the new drug
was patented before the end of the 2018 fiscal year.
Required:
1. Calculate the amount of research and development expense Janson should report in its 2018 income statement
related to this project.
2. Repeat requirement 1 assuming that Janson prepares its financial statements according to International Financial Reporting Standards.
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