The following costs were incurred by Mark Corporation during 2020:Legal fees paid to attorneys in connection with a patent application related to a new invention developed by the company's laboratory personnel: $40,000.Salaries of personnel involved in searching for applications of new research findings: $150,000.Cost of machinery acquired on January 1, 2020: $355,000. The machinery will be used in a current research and development project, as well as several other R&D projects over the next eight years, after which the machine is expected to be sold for $15,000. Mark Corporation uses straight-line depreciation.Costs of design, construction, and testing of preproduction prototypes of potential new product lines for the company: $70,000.Cost of developing a valuable new product that was successfully patented: $100,000.Cost of marketing research to promote the new product: $60,000.Required:Calculate the total research and development expense that should appear in Mark's 2020 income statement. $ __________

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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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The following costs were incurred by Mark Corporation during 2020:

Legal fees paid to attorneys in connection with a patent application related to a new invention developed by the company's laboratory personnel: $40,000.
Salaries of personnel involved in searching for applications of new research findings: $150,000.
Cost of machinery acquired on January 1, 2020: $355,000. The machinery will be used in a current research and development project, as well as several other R&D projects over the next eight years, after which the machine is expected to be sold for $15,000. Mark Corporation uses straight-line depreciation.
Costs of design, construction, and testing of preproduction prototypes of potential new product lines for the company: $70,000.
Cost of developing a valuable new product that was successfully patented: $100,000.
Cost of marketing research to promote the new product: $60,000.

Required:
Calculate the total research and development expense that should appear in Mark's 2020 income statement.

$ __________

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