During the current year, Carlson Industries, Inc. conducted significant research activities related to the development of a new computer chip. Carlson had the following cash expenditures:
Description Amount
Diagnostic equipment ( 5- year life, $ 10,000 residual value, SL
method, purchased January 1) …………………………………… $ 500,000
Salaries of laboratory technicians………………………………… 325,000
Testing materials used in experimentation………………………… 137,500
Supplies used in the testing process………………………………… 23,500
Salary for engineer in the design phase of production……………… 87,000
Depreciation expense on research facilities………………………… 8,000
Total Cost of Research Activities…………………………………… $ 1,081,000
Prepare all journal entries required to record Carlson’s R& D activities for the current year.