Question

Pharoah Company incurred the following costs during the current year in connection with its research and development activiti

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Answer #1

Total to be expensed for research and development = $ 397,500

Explanation

Calculation of amount to be reported as research and development expense by
Wildhorse on its current year income statement
$
Cost of equipment acquired that will have alternative uses in
(R&D expense)future R&D projects over the next 5 years (282,500 / 5)              56,500.00
Materials consumed in R&D projects              55,500.00
Consulting fees paid to outsiders for R&D projects            115,000.00
Personnel costs of persons involved in R&D projects            125,000.00
Indirect costs reasonably allocable to R&D projects              45,500.00
Total research and development expense 397,500.00
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