Question

Airfield Answers Corporation had several expenditures in 20X5:
a. Testing new plastic prior to use in commercial production
b. Redesign of prototype to improve performance
c. Testing electronic instrument components during their production
d. Study of the possible uses of a newly developed fuel
e. Start- up activities for the production of a newly developed jet
f. Construction of a prototype for a new jet model
g. Design of a new, more efficient wing for an existing airplane
h. Portion of vice- president’s salary, related to the time spent managing the research lab i. Experimentation to establish the properties of a new plastic just discovered
j. Current period amortization taken on the company’s laboratory research facilities
k. Salary of lab technician working on clinical trials of new drug

Required:
1. Explain the accounting policies required for costs in the research and development phases.
2. Which of the above expenditures are considered research? Development? Neither?



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  • CreatedFebruary 17, 2015
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