Over the past five years, Kanto reported Operating Expenses in the amount of $220 million (2021); $180 million (2020); $200million (2019); $160 million (2018); and $140 million (2017); each year, 10% of the Operating Expenses is R&D.

As an analyst, you believe the R&D expenses should be capitalized in order to better gauge Kanto’s financial position. You assume Kanto’s R&D activities benefit the company, on average, for 4 years. When you do the accounting adjustments, how much is the R&D amortization expenses in 2021? 

Please show sufficient details of your calculations, including brief explanations when necessary. Numerical figures alone, even if correct, do not earn you the mark.

Answer rating: 100% (QA)

Total operating Expense 220 180 200 160 140 ... View the full answer