Question

Sheridan Inc. incurred the following costs during the year ended December 31, 2021: Laboratory research aimed at discovery of new knowledge $300000 Costs of testing prototype and design modifications 62000 Quality control during commercial production, including routine testing 264000 of products Construction of research facilities having an estimated useful life of 6 years but no alternative future use 360000 The total amount to be classified and expensed as research and development in 2021 is:____________.

a. $986000.
b. $722000.
c. $422000.
d. $686000.

Answer 1

b. $722000.

Step-by-step explanation:

Total amount to be classified and expended as research and development in 2021

Particulars Amount

Laboratory research aimed at discovery of $300,000

new knowledge

Cost of testing prototype and design $62,000

modification

Construction of research facilities having $360,000

an estimated useful life

Total $722,000