Chapter 10, Problem 10.9BYP

1.

To determine

Research and development costs:

Research and development costs refers to the expenditures spent on research, development, improvement or introduction of new products, processes, a new patent or even a copyright, that a company expects to get benefits.

To Explain: The manner in which the equipment purchased for the Product T should be reported in Incorporation C’s income statements, and statements of financial position.

2. a.

To determine

To describe: The matching concept.

2 b.

To determine

To Describe: The accounting treatment of research and development costs, and justify it.

3.

To determine

To Describe: The manner in which the corporate headquarters’ costs allocated to the research division should be classified in Corporation C’s income statements and its reason.

4.

To determine

To Describe: The way in which the legal expenses incurred in defending Product T’s patent should be reported in the financial statements of Corporation C.