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Homework answers / question archive / FIRST GULF Inc paid the below costs in 2020: 1
FIRST GULF Inc paid the below costs in 2020: 1.5600.000 to purchase a R&D equipment which han a 3-year useful life to be used in the R&D projects (FIRST GULF started using the equipments on Jan, 2020 and a straight line depreciation method is applied), $450,000 for construction costs incurred to open a new plant JAS180,000 for the expenses to advertisew products 4.5300.000 for engineering costs cared to advance a new product to fill production stage (The Is NO con Viability 5.5150,000 for about research to get for GS50000 Toc tertai used in re cardin des lopincut project How much FIRST GULF Inc. should record as Research & Development expense in 2020?
Research and development expenditure of 2020 year is :
1. R & D equipment calculation..
$600000÷ 3years = 200000$ per year.
2. Material used in R& D = 50000$
3. Labortry Research expenses = 150000$
4. Total (1+2+3) =400000$ is the amount of expenditure should be recorded by First Gulf Inc. as R&D.
Note :- all other expenditures except the above are not related to R&D expenses , therefore excluded.
