In 2013, the Slidell Corporation incurred research and development costs as follows:

These costs relate to a product that will be marketed in 2014. It is estimated that these costs will be recouped by December 31, 2017.

1. What is the amount of research and development costs that should be expensed in 2013?

2. Assume that of these costs, equipment of $80,000 can be used on other research projects. The estimated useful life of the equipment is five years with no salvage value, and it was acquired at the beginning of 2013. What is the amount of research and development costs that should be expensed in 2013 under these conditions? Assume that depreciation on all equipment is computed on a straight-line basis.

Answer rating: 100% (QA)

Solution 1 Since there is no certainty of expected economic benefits and the... View the full answer