West Company purchased two machines for P1,000,000 each at the beginning of current year. The machines were put into use immediately. Machine A has a useful life of 5 years and can be used only in one research project. Machine B will be used for 2 years on a research and development project and then used by the production division for an additional 8 years. The straight line method of depreciation is used. What total amount should be recognized as research and development expense for the current year? a. 2,000,000 b. 1,500,000 c. 1,100,000. d. 300,000
West Company purchased two machines for P1,000,000 each at the beginning of current year. The machines were put into use immediately. Machine A has a useful life of 5 years and can be used only in one research project. Machine B will be used for 2 years on a research and development project and then used by the production division for an additional 8 years. The straight line method of depreciation is used. What total amount should be recognized as research and development expense for the current year? a. 2,000,000 b. 1,500,000 c. 1,100,000. d. 300,000
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Problem 33-11 (AICPA Adapted)
West Company purchased two machines for P1,000,000 each
at the beginning of current year. The machines were put into
use immediately.
Machine A has a useful life of 5 years and can be used only in
one research project.
Machine B will be used for 2 years on a research and
development project and then used by the production division
for an additional 8 years. The straight line method of
depreciation is used.
What total amount should be recognized as research and
development expense for the current year?
a. 2,000,000
b. 1,500,000
c. 1,100,000.
d.
300,000
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