Martinez Company incurred the following costs during 2015 in connection with its research and development activities.

Instructions Compute the amount to be reported as research and development expense by Martinez on its income statement for 2015. Assume equipment is purchased at the beginning of the year and economic viability has not been achieved.

Transcribed Image Text:

Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years (uses straight-line depreciation) Materials consumed in R&D projects Consulting fees paid to outsiders for R&D projects Personnel costs of persons involved in R&D projects Indirect costs reasonably allocable to R&D projects Materials purchased for future R&D projects $330,000 59,000 100,000 128,000 50,000 34,000