Delaware Company incurred the following research and development costs during 2018:
Salaries and wages for lab research .................................... $400,000
Materials used in R&D projects ........................................ 200,000
Purchase of equipment ................................................... 900,000
Fees paid to third parties for R&D projects ........................... 320,000
Patent filing and legal costs for a developed product ................ 65,000
Salaries, wages, and supplies for R&D work performed for
another company under a contract .................................... 350,000
Total........................................................................$2,235,000
The equipment has a seven-year life and will be used for a number of research projects. Depreciation for 2018 is $120,000.
Required:
Calculate the amount of research and development expense that Delaware should report in its 2018 income statement.