In 2011, Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company's fiscal year-end is December 31. All of the following 2011 expenditures were included in the R&D expense account:
Salaries and wages for:

$200,000 of equipment was purchased solely for use in one of the projects. After the project is completed, the equipment will be abandoned. The remaining $400,000 in equipment will be used on future R&D projects. The useful life of equipment is five years. Assume that all of the equipment was acquired at the beginning of the year.

Prepare journal entries, reclassifying amounts in R&D expense, to reflect the appropriate treatment of theexpenditures.

  • CreatedJuly 02, 2013
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