b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the deduction be? Amount of the deduction 2019 2020 0✓ 0 2021 2022 0X 132,198 X c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)? Amount of the deduction 2022 0X 2023 0X Problem 7-40 (LO. 5) Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the following expenses in connection with the project: 2019 2020 Salaries Materials $500,000 $600,000 90,000 70,000 Insurance 8,000 11,000 Utilities 6,000 8,000 Cost of inspection of materials for quality control 7,000 6,000 Promotion expenses 11,000 18,000 Advertising 0 20,000 Equipment depreciation 15,000 14,000 Cost of market survey 8,000 0 The new product will be introduced for sale beginning in July 2021. Determine the amount of the deduction for research and experimental expenditures for 2019, 2020, 2021, and 2022. If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations.
b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the deduction be? Amount of the deduction 2019 2020 0✓ 0 2021 2022 0X 132,198 X c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)? Amount of the deduction 2022 0X 2023 0X Problem 7-40 (LO. 5) Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the following expenses in connection with the project: 2019 2020 Salaries Materials $500,000 $600,000 90,000 70,000 Insurance 8,000 11,000 Utilities 6,000 8,000 Cost of inspection of materials for quality control 7,000 6,000 Promotion expenses 11,000 18,000 Advertising 0 20,000 Equipment depreciation 15,000 14,000 Cost of market survey 8,000 0 The new product will be introduced for sale beginning in July 2021. Determine the amount of the deduction for research and experimental expenditures for 2019, 2020, 2021, and 2022. If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations.
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 28CE
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Transcribed Image Text:b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the
deduction be?
Amount of the deduction
2019
2020
0✓
0
2021
2022
0X
132,198 X
c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather than 2019 and 2020)?
Amount of the deduction
2022
0X
2023
0X
Transcribed Image Text:Problem 7-40 (LO. 5)
Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2019. Blue had the
following expenses in connection with the project:
2019
2020
Salaries
Materials
$500,000 $600,000
90,000
70,000
Insurance
8,000
11,000
Utilities
6,000
8,000
Cost of inspection of materials for quality control
7,000
6,000
Promotion expenses
11,000
18,000
Advertising
0
20,000
Equipment depreciation
15,000
14,000
Cost of market survey
8,000
0
The new product will be introduced for sale beginning in July 2021. Determine the amount of the deduction for research and
experimental expenditures for 2019, 2020, 2021, and 2022.
If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent
computations.
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