Answer:
Sunland Company
The amount to be reported as research and development expense by Sunland on its current year income statement is:
= $412,600
Explanation:
a) Data and Calculations:
Cost of equipment acquired that will have alternative
uses in future R&D projects over the next 5 years (uses straight-line depreciation) $283,500
Materials consumed in R&D projects 55,700
Consulting fees paid to outsiders for R&D projects 117,000
Personnel costs of persons involved in R&D projects 137,500
Indirect costs reasonably allocable to R&D projects 45,700
Materials purchased for future R&D projects 32,700
R&D Expenses for the year:
Depreciation of equipment ($283,500/5) $56,700
Materials consumed in R&D projects 55,700
Consulting fees paid to outsiders for R&D projects 117,000
Personnel costs of persons involved in R&D projects 137,500
Indirect costs reasonably allocable to R&D projects 45,700
Total R&D costs for the current year = $412,600
