Abbott Laboratories reports the following income statement (in partial form):

including acquired in-process and collaborations R&D

a. Compute the percent of net sales that Abbott Laboratories spends on research and development (R&D). How would you assess the appropriateness of its R&D expense level?

b. Using the financial statement effects template, describe how the accounting for R&D expenditures affects Abbott Laboratories' balance sheet and income statement.

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Year Ended December 31 (S millions) 2018 Net sales..... Cost of products sold.... Amortization of intangible assets. Research and development"... Selling, general and administrative. $30,578 12,706 2,178 2,300 9,744 Total operating cost and expenses.. 26,928 Operating earnings... $ 3,650