Allen Corporation reported research and development costs for 2014 of $4,000,000. Which of the following is...
Allen Corporation reported research and development costs for 2014 of $4,000,000. Which of the following is true concerning this balance?
Group of answer choices
The $4,000,000 represents research and development costs for projects which did not prove successful.
Allen had a choice between expensing the $4,000,000 or capitalizing it to an asset account and amortizing it.
The $4,000,000 represents the amount spent on all research and development for 2014.
Investors do not care how much Allen spent on research and development.
If Allen uses IFRS, the research and development expense would have been higher than $4,000,000.
Homework Answers
Solution: Allen had a choice between expensing the $4,000,000 or capitalizing it to an asset account and amortizing it.
Explanation: Under IFRS Research costs are expensed while the development costs are capitalized. Thus Allen gets a choice between expensing or capitalizing amount of $400,000 to an asset account and amortizing it.
Add Answer to:
Allen Corporation reported research and development costs for
2014 of $4,000,000. Which of the following is...
Which of the following is true of accounting for research and development cost? Accounting for research...
Which of the following is true of accounting for research and development cost? Accounting for research and development costs is same under U.S. GAAP and IFRS. The current accounting for research and development costs under U.S. GAAP avoids the probability of companies to manipulate their earnings. Under U.S. GAAP accounting for research and development costs violates the conservative principle. U.S.GAAP adheres to the matching principle by expensing research and development costs.
Trecek Corporation incurs research and development costs of $666,000 in 2017, 30 percent of which relate...
Trecek Corporation incurs research and development costs of $666,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert...
In millions of euros Research and development expenditures of which: Development costs capitalize...
in millions of euros Research and development expenditures of which: Development costs capitalized from annual income statements: Pretax profit under IFRS from yearend balance sheets: Total assets under IFRS from annual statements of cash flow: Operating cash flow under IFRS Year 1 Year 2 Year 3 2,500 3,000 3,600 1,000 1,240 1,300 .400 9,800 9,500 78,000 80,000 84,000 5,000 5,300 4,800 As a starting point, you have reviewed descriptions of Remy's R&D activities and concluded that all R&D expenditures would...
28. Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which...
28. Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 36 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. a. Determine the appropriate accounting for research and development costs for the years ending December 31, 2017, and December 31, 2018, under (1)...
Problem 11-28 (LO 11-9) Trecek Corporation incurs research and development costs of $612,000 in 2017, 30...
Problem 11-28 (LO 11-9) Trecek Corporation incurs research and development costs of $612,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS....
GreenBeanCasserole (GBC) Corporation incurred $480 of research and development costs to develop a product for which...
GreenBeanCasserole (GBC) Corporation incurred $480 of research and development costs to develop a product for which a patent was granted on January 1, 2014. Legal fees and other costs associated with registration of the patent totaled $80,000. The patent has a legal life of 10 years and a useful life of 12 years. On January 1, 2016, GBC paid $120,000 for legal fees in a successful defense of the patent. (a) What is the total amount capitalized for the patent...
Which of the following statements is false? Multiple Choice In general, research & development costs should be expe...
Which of the following statements is false? Multiple Choice In general, research & development costs should be expensed as incurred until the point in time that commercial production will start. When expenditures are made after a capital asset has been acquired and put into use, those costs should be capitalized if the asset useful life is extended Companies may opt to value their financial liabilities such as bonds payable at their current fair value on the balance sheet. None of...
Which of the following is a benefit of the convergence between US GAAP and IFRS? Group...
Which of the following is a benefit of the convergence between US GAAP and IFRS? Group of answer choices B. All companies now have a choice between different sets of financial reporting standards C. The IASB and FASB use the exact same conceptual framework to generate accounting standards D. All companies will produce financial statements in English A. Increased comparability between financial statements produced in different countries As a result of the convergence efforts since 2007: Group of answer choices...
Task Details: Technology Enterprises Ltd, a listed company, commenced a research and development (R&D) project in July 2017 to modify the method of recharging batteries used in its products....
Task Details: Technology Enterprises Ltd, a listed company, commenced a research and development (R&D) project in July 2017 to modify the method of recharging batteries used in its products. The project was successfully completed in June 2018 and the company applied for a patent for the design Technology Enterprises Ltd plans to modify all products in its consumer range over the next two years and has incorporated these plans into its financial budget. The entity expects to derive economic benefits...
CVS Caremark Acquisition of Longs Drugstores CVS Caremark used an acquisition technique that enabled it to...
CVS Caremark Acquisition of Longs Drugstores CVS Caremark used an acquisition technique that enabled it to manage earnings in a blatantly fraudulent way. The acquisition of Longs Drugstores by CVS on October 20, 2008, illustrates what can happen when experts allow client management to make the call on how to account for a transaction. CVS called the shots and the firm that conducted the valuation of assets of Longs went along with unsubstantiated reductions in asset values even though its...
in millions of euros Research and development expenditures of which: Development costs capitalized from annual income statements: Pretax profit under IFRS from yearend balance sheets: Total assets under IFRS from annual statements of cash flow: Operating cash flow under IFRS Year 1 Year 2 Year 3 2,500 3,000 3,600 1,000 1,240 1,300 .400 9,800 9,500 78,000 80,000 84,000 5,000 5,300 4,800 As a starting point, you have reviewed descriptions of Remy's R&D activities and concluded that all R&D expenditures would...
28. Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 36 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. a. Determine the appropriate accounting for research and development costs for the years ending December 31, 2017, and December 31, 2018, under (1)...
Which of the following statements is false? Multiple Choice In general, research & development costs should be expensed as incurred until the point in time that commercial production will start. When expenditures are made after a capital asset has been acquired and put into use, those costs should be capitalized if the asset useful life is extended Companies may opt to value their financial liabilities such as bonds payable at their current fair value on the balance sheet. None of...
Task Details: Technology Enterprises Ltd, a listed company, commenced a research and development (R&D) project in July 2017 to modify the method of recharging batteries used in its products. The project was successfully completed in June 2018 and the company applied for a patent for the design Technology Enterprises Ltd plans to modify all products in its consumer range over the next two years and has incorporated these plans into its financial budget. The entity expects to derive economic benefits...
Most questions answered within 3 hours.
-
Which prezygotic barrier to reproduction results in hybrid
sterility?
Question 11 options:
A)
Habitat isolation
B)...
asked 2 minutes ago -
Give an answer that's easy to understand. Define stack data
structure. Show how the Stack operations...
asked 3 minutes ago -
Potassium hydrogen phthalate is a solid, monoprotic acid
frequently used in the laboratory to standardize strong...
asked 3 minutes ago -
You own a portfolio that has $2709 invested in Stock A and $4387
invested in Stock...
asked 21 minutes ago -
A parameter estimate is said to be statistically significant if
there is sufficient evidence that the...
asked 19 minutes ago -
Based on the following table, calculate the ES, EF, LS, LF and
Slack for each activity...
asked 17 minutes ago -
The Work Breakdown Structure is always created using a phased-in
approach.
True/False
asked 34 minutes ago -
In a thermodynamically sealed container, 30.0 g of 22.0∘ ∘ C
water is mixed with 50.0...
asked 34 minutes ago -
what ate the mechanisms that pseudomonas aeruginosa utilize to
cause disease on skin and in the...
asked 39 minutes ago -
What is the present value of the following? Use Appendix B as an
approximate answer, but...
asked 41 minutes ago -
A 0.500 kg ice puck, moving east with a speed of 5.10 m/s ,
has a...
asked 47 minutes ago -
Draw an EER diagram for the following problem and map it into
tables: the sponsors of...
asked 48 minutes ago