Delaware Company incurred the following research and development costs during 20

Question

Delaware Company incurred the following research and development costs during 2018:

The equipment has a eight-year life and will be used for a number of research projects. Depreciation for 2018 is $150,000.

Required:
Calculate the amount of research and development expense that Delaware should report in its 2018 income statement.
  

Salaries and wages for lab research $ 430,000 Materials used in R&D projects 230,000 Purchase of equipment 930,000 Fees paid to third parties for R&D projects 350,000 Patent filing and legal costs for a developed product 68,000 Salaries, wages, and supplies for R&D work performed for another company under a contract 380,000 Total $ 2,388,000

Explanation / Answer

Total R&D Expense = Salaries and wages for lab research + Materials used in R&D projects + Fees paid to outsiders for R&D projects + Depreciation on R&D equipment

................................= $430,000 + $230,000 + $350,000 + $150,000

................................= $1,160,000

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