Question

Eve Inc. incurred research and development costs in 2016 as follows:

Materials used in research and development projects	$   850,000
Equipment acquired that will have alternate future uses in future research and development projects	3,000,000
Depreciation for 2016 on above equipment	300,000
Personnel costs of persons involved in research and development projects	750,000
Consulting fees paid to outsiders for research and development projects	300,000
Indirect costs reasonably allocable to research and development projects	225,000
	$5,425,000

                                                                                                                         

Assume economic viability has not been achieved.

The amount of research and development costs charged to Eve’s 2016 income statement should be $ Answer

Burgio Company purchases Whitney Company for $840,000 cash on January 1, 2016. The book value of Whitney Company’s net assets, as reflected on its December 31, 2015 statement of financial position is $620,000. An analysis by Burgio on December 31, 2015 indicates that the fair value of Whitney’s tangible assets exceeded the book value by $60,000, and the fair value of identifiable intangible assets exceeded book value by $45,000. How much goodwill should be recognized by Burgio Company when recording the purchase of Whitney Company?

On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available:

Sales, January 1 through April 15                           $300,000

Inventory, January 1                                                   50,000

Purchases, January 1 through April 15                     250,000

Markup on cost                                                               25%

The amount of the inventory loss is estimated to be $ Answer

Answer 1

Computation of research and development cost charged to Eve.inc,for the year

1. Materials used in research and development projects 850,000$

2. Equipment acquired that will have alternate future uses in future research

   and development projects NILL

3. Depreciation for 2016 on above equipment 300,000$

4. Personnel costs of persons involved in research and development projects 750,000$

5. Consulting fees paid to outsiders for research and development projects 300,000$

6. Indirect costs reasonably allocable to research and development projects 225,000$

7. Total amount charged to income statement $2,425,000