Question

Check my work 1In-2018, Space Technology Compary mcd In 2018, Space Technology Company modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures: 10 points Basic research to develop the technology Engineering design work Development of a prototype device Acquisition of equipment Testing and modification of the prototype Legal and other fees for patent application on the new communication system Legal fees for successful defense of the new patent $2,200,000 720,000 340,000 64,000 240,000 44,000 24,000 $3,632,000 eBook Total Hint Print The equipment will be used on this and other research projects. Depreciation on the equipment for 2018 is $14,000. ReferencesDuring your year-end review of the accounts related to intangibles, you discover that the company has capitalized all of the above as costs of the patent. Management contends that the device simply represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized Required Prepare correcting entries that reflect the appropriate treatment bf the expenditures. (If no entry is required for a transaction/event select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet

Answer 1

Answer:

Calculation of Research and Development Expense
Basic research to develop the technology	$22,00,000
Engineering design work	$7,20,000
Development of a prototype device	$3,40,000
Testing and modification of the prototype	$2,40,000
Total	$35,00,000

Journal Entry
Date	General Journal	Debit($)	Credit($)
1	Research and Development Expense	$35,00,000
	Patent		$35,00,000
	( To Record   R&D expense)
2	Equipment(44,000+24,000)	$68,000
	Patent		$68,000
	(To Record the capitalize the cost of equipment )
3	Research and Development Expense	$14,000
	Accumulated Depreciation- Equipment		$14,000
	(To record depreciation on equipment used in R&D projects.)