Accounting for R&D Costs Martinez Company incurred the following costs during 2010 in connection with its research

Question:

Accounting for R&D Costs Martinez Company incurred the following costs during 2010 in connection with its research and development activities.

Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years

(uses straight-line depreciation).............................................$330,000

Materials consumed in R&D projects.........................................59,000

Consulting fees paid to outsiders for R&D projects...............100,000

Personnel costs of persons involved in R&D projects............128,000

Indirect costs reasonably allocable to R&D projects.................50,000

Materials purchased for future R&D projects...........................34,000

Compute the amount to be reported as research and development expense by Martinez on its income statement for 2010. Assume equipment is purchased at the beginning of the year.

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing...