Maxtor Technology incurred the following costs during the year related to the creation of a new type of personalcomputer monitor:Salaries$220,000Depreciation on R&D facilities and equipmentUtilities and other direct costs incurred for the R&D facilitiesPatent filing and related legal costsPayment to another company for performing a portion of thedevelopment workCosts of adapting the new monitor for the specific needs of a125,00066,00022,000120,00080,000customerWhat amount should Maxtor report as research and development expense in its income statement?

Research and development costs: Research and development costs refers to the expenditures spent on…

Answered: Maxtor Technology incurred the…

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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Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: Machine A Machine B Original Cost $15,000 $24,000 Labor per year $2,400 $4,000 Maintenance per year $4,300 $800 Salvage value $2,000 $7,500 He is told to assume that: 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year. The NPV for Machine B= $._____enter your response here
Munoz Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (13,100 Units × $19) $ 248,900 Labor (13,100 Units × $12) 157,200 Depreciation on manufacturing equipment* 25,000 Salary of supervisor of engine production 69,000 Rental cost of equipment used to make engines 27,000 Allocated portion of corporate-level facility-sustaining costs 82,000 Total cost to make 13,100 engines $ 609,100 *The equipment has a book value of $108,000 but its market value is zero.Required Determine the maximum price per unit that Munoz would be willing to pay for the engines. Determine the maximum price per unit that Munoz would be willing to pay for the engines, if production increased to 18,650 units. (For all requirements, Round your answers to 2 decimal places.)
During year 1, Perez Manufacturing Company incurred $117,500,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $64 per unit. Packaging, shipping, and sales commissions are expected to be $11 per unit. Perez expects to sell 2,500,000 batteries before new research renders the battery design technologically obsolete. During year 1, Perez made 434,000 batteries and sold 395,000 of them. Fill in the GAAP-based income statement for year 1. Use the sales price = 93.75 PEREZ MANUFACTURING COMPANY Income Statement Sales revenue Cost of goods sold Gross margin Depreciation expense Inventory holding expense Research & development expense Net income (loss) 0 $0 F
Wonder Mountain Company operates a snow sports resort for skiers and snowboarders. The company has recently decided to replace an existing old chair lift with a new high-speed quad chair and expand the hill to allow for increased capacity. The chair lift was a $886,000 asset on the books, 90% depreciated. The work was completed from April to November. Wonder Mountain incurred the following costs for the expansion: Invoice price high-speed quad chair lift Costs to dismantle old chair lift Cash received for sale used chair lift Shipping costs for delivery Landscape architect fees, grading expansion hill Permit costs Clearing trees/grading land for expansion Installation of concrete bases for chair lift Helicopter rental to install towers for chair lift Labour installation ski lift Training employees on maintenance and operation Testing of chair lift Interest costs on loan for construction General overhead costs Annual routine maintenance Purchase tools required for annual maintenance…
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G
Double Island Ltd constructed a Whizbang Machine and incurred the following costs in doing so: Amounts paid to employees to build the machine $120 000 Raw materials consumed in building the machine $45 000 Depreciation of manufacturing equipment attributed to the construction of the Whizbang Machine $25 000 REQUIRED Provide the journal entries that Double Island Ltd would use to account for the construction of the asset. Assume that immediately after the journal entries in part (a) have been made, new information becomes available that indicates that the recoverable amount of the Whizbang Machine is only $160 000. Provide the adjusting journal entries
Manshukh
A company's research department incurred $1,000,000 in material, labor, and overhead costs to construct a prototype of a new product and $100,000 to test and modify the prototype. Which of the following statements correctly describes the accounting treatment of prototype costs incurred by the company? 1. Capitalize $1,100,000 and amortize it over the expected sales life of the new product 2. Capitalize $1,100,000 and amortize it over the life of the prototype. 3. Capitalize $1,000,000 and amortize it over the life of the prototype and expense $100,000 as incurred. 4. Expense $1,100,000 as incurred.
Sandhill Communications contracted to set up a call center for the City of Phoenix. Under the terms of the contract, Sandhill Communications will design and set-up a call center with the following costs: Design of call center $18000 Computers, servers, telephone equipment $510000 Software $150000 Installation and testing of equipment $26000 Selling commission $46000 Annual service contract $80000 In addition, Sandhill Communications will maintain and service the equipment and software to ensure smooth operations of the call center for an annual fee of $160000. Ownership of equipment installed remains with the City of Phoenix. The contract costs that should be capitalized is $678000. $830000. $660000. $750000.
Zachary Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (14,700 units x $19) Labor (14,700 units × $25) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 14,700 engines *The equipment has a book value of $101,000 but its market value is zero. Required $ 279,300 367,500 37,000 84,000 16,000 79,000 $ 862,800 a. Determine the maximum price per unit that Zachary would be willing to pay for the engines. b. Determine the maximum price per unit that Zachary would be willing to pay for the engines, if production increased to 18,350 units. Note: For all requirements, round intermediate and final answers to 2 decimal places. a. Maximum price per unit b. Maximum…
Candalibra Company incurred the following costs during the year ended December 31, 2018: Laboratory research aimed at discovery of new knowledge $300,000 Costs of testing prototype and design modifications (economic viability not achieved) 55,000 Quality control during commercial production, including routine testing of products 210,000 Construction of research facilities having an estimated useful life of 12 years but no alternative future use 440,000 What is the total amount to be classified and expensed as research and development in 2018 under U.S. GAAP? 79

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