Problem 7-40 (LO. 5) Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2018. Blue had the following expenses in connection with the project: Salaries Materials Insurance Utilities Cost of inspection of materials for quality control Promotion expenses Advertising Equipment depreciation Cost of market survey 2018 2019 $500,000 $600,000 90,000 8,000 6,000 7,000 11,000 2018 0 15,000 8,000 a. The new product will be introduced for sale beginning in July 2020. Determine the amount of the deduction for research and experimental expenditures for 2018, 2019, and 2020. If an amount is zero, enter 0. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 70,000 11,000 8,000 6,000 18,000 20,000 14,000 2019 2020
Problem 7-40 (LO. 5) Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2018. Blue had the following expenses in connection with the project: Salaries Materials Insurance Utilities Cost of inspection of materials for quality control Promotion expenses Advertising Equipment depreciation Cost of market survey 2018 2019 $500,000 $600,000 90,000 8,000 6,000 7,000 11,000 2018 0 15,000 8,000 a. The new product will be introduced for sale beginning in July 2020. Determine the amount of the deduction for research and experimental expenditures for 2018, 2019, and 2020. If an amount is zero, enter 0. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 70,000 11,000 8,000 6,000 18,000 20,000 14,000 2019 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:a. The new product will be introduced for sale beginning in July 2020. Determine the amount of the deduction for research and
experimental expenditures for 2018, 2019, and 2020.
If an amount is zero, enter 0.
If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be?
Amount of the deduction
Feedback
2018
Amount of the deduction
26,000 X
b. If Blue Corporation elects to amortize the research and experimental expenditures over 60 months, what will the amount of the
deduction be?
When required, calculate the monthly expense to the nearest dollar and use in subsequent computations. If an amount is zero, enter 0.
2018
2019
0
2020
2019
2020
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 2018. Blue had the
following expenses in connection with the project:
<
Salaries
Materials
Insurance
Utilities
Cost of inspection of materials for quality control
Promotion expenses
Advertising
Equipment depreciation.
Cost of market survey
2018
2018
$500,000 $600,000
90,000
70,000
8,000
11,000
6,000
8,000
7,000
6,000
11,000
0
15,000
8,000
2019
2019
18,000
20,000
14,000
a. The new product will be introduced for sale beginning in July 2020. Determine the amount of the deduction for research and
experimental expenditures for 2018, 2019, and 2020.
If an amount is zero, enter 0.
If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be?
0
2020
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