8.

value: 3.00 points

Problem 10-11 Research and development [LO10-8]

In 2013, Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company's fiscal year-end is December 31. All of the following 2013 expenditures were included in the R&D expense account:

Salaries and wages for:
Lab research	$	370,000
Design and construction of preproduction prototype		230,000
Quality control during commercial production		27,000
Materials and supplies consumed for:
Lab research		67,000
Construction of preproduction prototype		37,000
Purchase of equipment		670,000
Patent filing and legal fees for completed project		47,000
Payments to others for research		155,000
Total	$	1,603,000

$235,000 of equipment was purchased solely for use in one of the projects. After the project is completed, the equipment will be abandoned. The remaining $435,000 in equipment will be used on future R&D projects. The useful life of equipment is five years. Assume that all of the equipment was acquired at the beginning of the year.

Required:

Prepare journal entries, reclassifying amounts in R&D expense, to reflect the appropriate treatment of the expenditures. (If no entry is required for particular aevent, select "No journal entry required" in the first account field.)