Loazia Inc. incurred the following costs during the year ended December 31, 2013: Laboratory research aimed at discovery of new knowledge $230,000 Costs of testing prototype and design modifications $45,000 Quality control during commercial production, including routine testing of products $270,000 Construction of research facilities having an estimated useful life of 6 years but no alternative future use $360,000 The total amount to be classified and expensed as research and development in 2013 is ____________.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Loazia Inc. incurred the following costs during the year ended December 31, 2013:
Laboratory research aimed at discovery of new knowledge |
$230,000 |
Costs of testing prototype and design modifications |
$45,000 |
Quality control during commercial production, including routine testing of products |
$270,000 |
Construction of research facilities having an estimated useful life of 6 years but no alternative future use |
$360,000 |
The total amount to be classified and expensed as research and development in 2013 is ____________.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images