Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2014. Blue had the following expenses in connection with the project.

The new product will be introduced for sale beginning in July 2016. Determine the amount of the deduction for research and experimental expenditures for 2014, 2015, and 2016 if:
a. Blue Corporation elects to expense the research and experimental expenditures.
b. Blue Corporation elects to amortize the research and experimental expenditures over 60 months.

2014 2015 Salaries Materials Insurance Utilities Cost of inspection of materials for quality $500,000 $600,000 70,000 11,000 8,000 90,000 8,000 6,000 7,000 11,000 control Promotion expenses Advertising Equipment depreciation Cost of market survey 6,000 18,000 20,000 14,000 15,000 8,000