32. Instructions : Choose the best multiple choice answer and explain why you ch
ID: 2587783 • Letter: 3
Question
32. Instructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.
____ 32. Black Corporation incurred the following expenses in connection with the development of a new product:
Salaries
$110,000
Utilities
16,000
Materials
15,000
Advertising
5,000
Market survey
3,000
Depreciation on machine
10,000
Black expects to begin selling the product in November 1 of this year. If Black elects to amortize research and experimental expenditures over 60 months, determine the amount of the deduction for research and experimental expenditures for the current year.
a.
$0.
b.
$151,000.
c.
$5,034.
d.
$152,000.
e.
None of the above.
Salaries
$110,000
Utilities
16,000
Materials
15,000
Advertising
5,000
Market survey
3,000
Depreciation on machine
10,000
Explanation / Answer
Answer e. None of the above
Explanation :- The amount of deduction for research and development expenditure of the current year is:-
110000 + 16000 + 15000 + 5000 + 3000 - 10000 = $139000
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