Janson Pharmaceuticals incurred the following costs in 2018 related to a new cancer drug: Research for...
Janson Pharmaceuticals incurred the following costs in 2018
related to a new cancer drug:
| Research for new formulas | $ | 2,475,000 | |
| Development of a new formula | 1,650,000 | ||
| Legal and filing fees for a patent for the new formula | 65,000 | ||
| Total | $ | 4,190,000 | |
The development costs were incurred after technological and
commercial feasibility was established and after the future
economic benefits were deemed probable. The project was
successfully completed and the new drug was patented before the end
of the 2018 fiscal year.
Required:
1. Calculate the amount of research and
development expense Janson should report in its 2018 income
statement related to this project.
2. Calculate the amount of research and
development expense Janson should report in its 2018 income
statement related to this project. Assuming that Janson prepares
its financial statements according to International Financial
Reporting Standards.
Homework Answers
1) Research and development expense = $4,190,000 - $65,00 = $4,125,000
Search and development course should exclude legal fees.
2) Research and development expense = $2,475,000
Add Answer to:
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