Ogoki Inc. creates new products through research and development. In 2021, Ogoki spent $500,000 researching a new process. The research was completed in 2022 at an additional cost of $60,000; as well, $10,000 was spent obtaining the patent. Then further costs related to the patented process of $200,000 were incurred to create a marketable product. The product was completed and ready for market half-way through the fiscal year. The new product was advertised heavily in 2022 at a cost of $70,000. Soon after the launch of the new product, $30,000 was spent successfully defending the patent. The product has a life cycle of 4 years. Ogoki has a December 31 fiscal year end.

Explain how Ogoki should present the above expenditures in the financial statements for 2021 and 2022.