Question
In: Accounting
Diaz Company incurred the following costs during the year 2020. 1. Salaries expense related to design...
Diaz Company incurred the following costs during the year 2020.
| 1. | Salaries expense related to design for a trademark with an indefinite estimated life | $12,000 |
| 2. | Materials used for research and development projects for the current year | 20,000 |
| 3. | Fees paid to external consultants related to research and development projects | 60,000 |
| 4. | Trouble-shooting in connection with breakdowns during production | 36,000 |
| 5. | Design of tooling involving new technology | 18,000 |
| 6. | Cost of equipment (purchased January 2019) that will have alternative uses over 6 years | 160,000 |
| 7. | Salaries expense related to updates to an existing product | 80,000 |
| 8. | Allocation of rent expense for a facility partially used for research and development activities | 30,000 |
| 9. | Routine testing of product during commercial production | 56,000 |
Determine the amount of research and development costs that would be disclosed in the financial statements of Diaz company for the year 2020.
Note: Round your answer to the nearest whole dollar.
Solutions
Expert Solution
| Sr. No. | Particulars | Amount | R& D Amount |
| 1 | Salaries expense related to design for a trademark with an indefinite estimated life | 12,000 | 12,000 |
| 2 | Materials used for research and development projects for the current year | 20,000 | 20,000 |
| 3 | Fees paid to external consultants related to research and development projects | 60,000 | 60,000 |
| 4 | Trouble-shooting in connection with breakdowns during production | 36,000 | 0 |
| 5 | Design of tooling involving new technology | 18,000 | 18,000 |
| 6 | Cost of equipment (purchased January 2019) that will have alternative uses over 6 years | 1,60,000 | 26,667 |
| 7 | Salaries expense related to updates to an existing product | 80,000 | 0 |
| 8 | Allocation of rent expense for a facility partially used for research and development activities | 30,000 | 30000 |
| 9 | Routine testing of product during commercial production | 56,000 | 0 |
| Grand Total | 4,72,000 | 1,66,667 | |
the amount of research and development costs that would be disclosed in the financial statements of Diaz company for the year 2020 is 166667
ekkarill92 answered 1 year agoRelated Solutions
Diaz Company incurred the following costs during the year 2020. 1. Salaries expense related to design...
Diaz Company incurred the following costs during the year
2020.
1.
Salaries expense related to design for a trademark with an
indefinite estimated life
$12,000
2.
Materials used for research and development projects for the
current year
20,000
3.
Fees paid to external consultants related to research and
development projects
60,000
4.
Trouble-shooting in connection with breakdowns during
production
36,000
5.
Design of tooling involving new technology
18,000
6.
Cost of equipment (purchased January 2019) that will have
alternative uses...
Identifying Research and Development Costs Diaz Company incurred the following costs during the year 2020. 1....
Identifying Research and Development Costs
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2020.
1.
Salaries expense related to design for a trademark with an
indefinite estimated life
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2.
Materials used for research and development projects for the
current year
8,000
3.
Fees paid to external consultants related to research and
development projects
24,000
4.
Trouble-shooting in connection with breakdowns during
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14,400
5.
Design of tooling involving new technology
7,200
6.
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