Abbott Laboratories reports the following income statement (in partial form): Year Ended December 31 ($ millions) Net

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

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Year Ended December 31 ($ millions) Net sales.... Cost of products sold.. Amortization of intangible assets.. Research and development Selling, general and administrative Total operating cost and expenses Operating earnings...... 2014 $20,247 9,218 555 1,345 6,530 17,648 $ 2,599 *including acquired in-process and collaborations R&D a. Compute the percent of net sales that Abbott Laboratories spends on research and develop- ment (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 expen- ditures affects Abbot Laboratories' balance sheet and income statement.