21. Theta Co. incurred costs to develop a new product in Year 1, amounting to $400,000....

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21. Theta Co. incurred costs to develop a new product in Year 1, amounting to $400,000. Of that amount, $300,000 was incurred up to the point at which PIRATE criteria were met. In Year 2, Theta Company incurred an additional $300,000 in costs in the development of the product. The product was available for sale on January 2, Year 3, with the first shipment to the customer occurring in mid-February, Year 3. Sales of the product are expected to continue for four years, at which time it is expected that a replacement product will need to be developed, residual value is zero. Required: A, Determine the amount of R&D cost to be capitalized as an intangible asset? 21. Theta Co. incurred costs to develop a new product in Year 1, amounting to $400,000. Of that amount, $300,000 was incurred up to the point at which PIRATE criteria were met. In Year 2, Theta Company incurred an additional $300,000 in costs in the development of the product. The product was available for sale on January 2, Year 3, with the first shipment to the customer occurring in mid-February, Year 3. Sales of the product are expected to continue for four years, at which time it is expected that a replacement product will need to be developed, residual value is zero. Required: A, Determine the amount of R&D cost to be capitalized as an intangible asset?

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This question relates to accounting principles specifically the treatment of research and development RD costs under the accounting standards for inta... View the full answer