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Setler79 [48]
2 years ago
12

Maxtor Technology incurred the following costs during the year related to the creation of a new type of personal computer monito

r:
Salaries $240,000
Depreciation on R&D facilities and equipment 135,000
Utilities and other direct costs incurred for the R&D facilities 68,000
Patent filing and related legal costs 24,000
Payment to another company for performing a portion of the development work 130,000
Costs of adapting the new monito for the specific needs of a customer 82,000
What amount should Maxtor report as research and development expense in its income statement?
Business
1 answer:
Radda [10]2 years ago
3 0

Answer:

Research and development expense is $679,000.

Explanation:

Creation of a new type of personal computer monitor is an internally generated intangible asset.

The Costs directly incurred in developing an internally generated intangible asset are all expensed until the intangible asset is technically physiable for operation.

Research and Development costs are thus expensed.

<u>Calculation of Research and Development Cost</u>

Salaries                                                                                        $240,000

Depreciation on R&D facilities and equipment                         $135,000

Utilities and other direct costs incurred for the R&D facilities  $ 68,000

Patent filing and related legal costs                                            $24,000

Payment to another company for  development work             $130,000

Costs of adapting the new monitor                                             $82,000

Total                                                                                             $679,000

Conclusion :

Research and development expense is $679,000.

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Answer:

When using a financial calculator to compute the issue price of the bonds, the applicable periodic interest rate ("I") is 3.923%

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