Question

Sandhill Co. incurred the following costs during 2018:

Significant modification to the formulation of a chemical product	$168000
Trouble-shooting in connection with breakdowns during commercial
production	158000
Cost of exploration of new formulas	208000
Seasonal or other periodic design changes to existing products	193000
Laboratory research aimed at discovery of new technology	363000

In its income statement for the year ended December 31, 2018, Sandhill should report research and development expense of

$932000.

$1090000.

$897000.

$739000.

Answer 1

Amount of research and Development expenses to be reported = 168,000 + 208,000 + 363,000 = 739,000 Option D is the answer