Pringle Company has a substantial research department. Following are listed, in chronological order, some of the major
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Project Started
(a) Purchased special equipment to be used solely for this project.
(b) Purchased general equipment that will be usable in Pringle’s normal operations.
(c) Allocated overhead to the project.
Technological Feasibility Established
(d) Purchased more special equipment to be used solely for this project.
(e) Performed tests on an early model of the product.
(f) Allocated overhead to the project.
Product Becomes Ready for Production
(g) Incurred direct production costs.
(h) Allocated overhead to the products.
1. For each activity (a) through (h), indicate whether the cost should be capitalized (C), expensed (E), or included in cost of inventory (I).
2. Repeat (1), assuming that Pringle is a computer software development company.
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Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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