During 2018, Wildhorse Company purchased a building site for its proposed research and development laboratory at...
During 2018, Cullumber Company purchased a building site for its
proposed research and development laboratory at a cost of $67,000.
Construction of the building was started in 2018. The building was
completed on December 31, 2019, at a cost of $480,000 and was
placed in service on January 2, 2020. The estimated useful life of
the building for depreciation purposes was 20 years. The
straight-line method of depreciation was to be employed, and there
was no estimated residual value.
Management...
During 2018, Carla Vista Company purchased a building site for its proposed research and development laboratory at a cost of $55,000. Construction of the building was started in 2018. The building was completed on December 31, 2019, at a cost of $360,000 and was placed in service on January 2, 2020. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value....
During 2015, Carla Vista Company purchased a building site for
its proposed research and development laboratory at a cost of
$63,000. Construction of the building was started in 2015. The
building was completed on December 31, 2016, at a cost of $440,000
and was placed in service on January 2, 2017. The estimated useful
life of the building for depreciation purposes was 20 years. The
straight-line method of depreciation was to be employed, and there
was no estimated residual value....
In 2018, Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company's fiscal year-end is December 31. All of the following 2018 expenditures were included in the R&D expense account: $ 460,000 320,000 36,000 Salaries and wages for: Lab research Design and construction of preproduction prototype Quality control during commercial production Materials and supplies consumed for: Lab research Construction of preproduction prototype...
In 2018, Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company's fiscal year-end is December 31. All of the following 2018 expenditures were included in the R&D expense account: Salaries and wages for: Lab research Design and construction of preproduction prototype Quality control during commercial production 490,000 350,000 39,000 Materials and supplies consumed for: 79,000 49,000 790,000 59,000 215,000 $2,071,000 Lab...
1. Wildhorse purchased a patent from Vania Co. for $1,310,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Wildhorse determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported...
In 2018, Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company's fiscal year-end is December 31. All of the following 2018 expenditures were included in the R&D expense account: $ 450,000 31e, see 35,00 Salaries and wages for Lab research Design and construction of preproduction prototype Quality control during commercial production Materials and supplies consumed for: Lab research Construction of preproduction...
Exercise 10-07
Wildhorse Furniture Company started construction of a combination
office and warehouse building for its own use at an estimated cost
of $14,000,000 on January 1, 2020. Wildhorse expected to complete
the building by December 31, 2020. Wildhorse has the following debt
obligations outstanding during the construction period.
Construction loan-12% interest, payable semiannually, issued
December 31, 2019
$5,600,000
Short-term loan-10% interest, payable monthly, and principal
payable at maturity on May 30, 2021
3,920,000
Long-term loan-11% interest, payable on January...
Cao incurred $115,000 of experimental and development costs in its laboratory during 2018 to develop a patent that was granted on July 1, 2018. Legal fees and other costs associated with registration of the patent totaled $27,000. Legal costs to defend the patent totaling $8,700 were paid on November 1, 2018. Cao estimates that the useful life of the patent will be 10 years that starts on July 1, 2018. What will be the value of the patent on the...
Pharoah Company incurred the following costs during the current year in connection with its research and development activities. Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years (uses straight-line depreciation) Materials consumed in R&D projects Consulting fees paid to outsiders for R&D projects Personnel costs of persons involved in R&D projects Indirect costs reasonably allocable to R&D projects Materials purchased for future R&D projects $282,500 55,500 115,000 125,000 45,500 32,500 Compute...