Question

17. During Year 1, Reforce Company conducted research and development on a new product and incurred...

17. During Year 1, Reforce Company conducted research and development on a new product and incurred $60,000 research and $300,000 development cost. The company had determined that all of the IAS 38 criteria have been met for capitalization of development cost. On January 2, Year 2, the product is ready for sale and is expected to be marketable for 3 years.

What was the difference between IFRS and U.S.GAAP for Year 1 net income?

A.

Net income under IFRS was $300,000 higher than net income under U.S.GAAP.
B.

Net income under IFRS was $300,000 lower than net income under U.S.GAAP.
C.

Net income under IFRS was $360,000 higher than net income under U.S.GAAP.
D.

There was no difference for net income under IFRS and U.S.GAAP

18. During Year 1, Reforce Company conducted research and development on a new product and incurred $60,000 research and $300,000 development cost. The company had determined that all of the IAS 38 criteria have been met for capitalization of development cost. On January 2, Year 2, the product is ready for sale and is expected to be marketable for 3 years.

What was the difference between IFRS and U.S.GAAP for Year 1 total assets?

A.

Total assets under IFRS were $300,000 lower than total assets under U.S.GAAP.
B.

Total assets under IFRS were $360,000 higher than total assets under U.S.GAAP.
C.

Total assets under IFRS were $300,000 higher than total assets under U.S.GAAP.
D.

There was no difference for total assets under IFRS and U.S.GAAP.

19. During Year 1, Reforce Company conducted research and development on a new product and incurred $60,000 research and $300,000 development cost. The company had determined that all of the IAS 38 criteria have been met for capitalization of development cost. On January 2, Year 2, the product is ready for sale and is expected to be marketable for 3 years.

What was the impact on Year 2 net income under IFRS?

A.

$300,000 Amortization expense was debited
B.

$100,000 Amortization expense was debited.
C.

$100,000 Development cost was debited
D.

There was no impact on Year 2 net income.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In year 1, in a project to develop product X, Lincoln company incurred research and development...
In year 1, in a project to develop product X, Lincoln company incurred research and development cost totaling $10 million. Lincoln is able to clearly distinguish the research phase from the development phase of the project. Research- phase costs are $6million, and development - phase costs are $4millon, All of the IAS 38 criteria have been met for recognition of the development costs. Product X was brought to market in year 2 and its expected to be marketable for five...
Trecek Corporation incurs research and development costs of $682,000 in 2017, 30 percent of which relate...
Trecek Corporation incurs research and development costs of $682,000 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...
Ooredoo Oman is considering of developing a new product line. Development will take six years and...
Ooredoo Oman is considering of developing a new product line. Development will take six years and will cost 200,000 Omani Rials per year. Once the product is ready, it is expected to make 300,000 Omani Rials per year for the next 10 years. Assume the cost of capital is 10 percent. (3 points) i)     Calculate the Net Present Value of this investment opportunity, assuming all the cash flows occur at the end of each year. Should the company make the investment?...
Exercise 12-17 Crane Company incurred the following costs during the current year in connection with its...
Exercise 12-17 Crane Company incurred the following costs during the current year in connection with its research and development activities. Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years (uses straight-line depreciation) $280,500 Materials consumed in R&D projects 55,100 Consulting fees paid to outsiders for R&D projects 111,000 Personnel costs of persons involved in R&D projects 131,500 Indirect costs reasonably allocable to R&D projects 45,100 Materials purchased for future R&D projects...
Carla Vista Company incurred the following costs during the current year in connection with its research...
Carla Vista Company incurred the following costs during the current year in connection with its research and development activities. Cost of equipment acquired that will have alternative    uses in future R&D projects over the next 5 years    (uses straight-line depreciation) $289,500 Materials consumed in R&D projects 56,900 Consulting fees paid to outsiders for R&D projects 129,000 Personnel costs of persons involved in R&D projects 121,500 Indirect costs reasonably allocable to R&D projects 46,900 Materials purchased for future R&D projects 33,900...
During 2018, Crane Company purchased a building site for its proposed research and development laboratory at...
During 2018, Crane Company purchased a building site for its proposed research and development laboratory at a cost of $53,000. Construction of the building was started in 2018. The building was completed on December 31, 2019, at a cost of $460,000 and was placed in service on January 2, 2020. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value. Management...
Companies engage in research and development (R&D) in order to develop new products, processes, and/or ideas...
Companies engage in research and development (R&D) in order to develop new products, processes, and/or ideas that may provide future value. Under U.S. GAAP, all R&D costs are expensed in the year incurred (no asset recorded). For example, if a company spent $1,000,000 cash on R&D in 2017, U.S. GAAP would require the following journal entry: R&D Expense 1,000,000 Cash 1,000,000 Thus, the $1,000,000 expenditure would result in a $1,000,000 (pre-tax) reduction in income for 2017. Under IFRS, research costs...
1-B&B Cancer Center of Dallas incurred the following costs during the year: Research and development costs...
1-B&B Cancer Center of Dallas incurred the following costs during the year: Research and development costs $222,000 Patent 122,500 Trademark 27,500 Marketing costs 40,000 Purchase of MRI 162,750 How much of these costs should be capitalized? $574,750 $264,750 $312,750 $150,000 2. Which of the following is correct regarding the process of benchmarking? It occurs when a company increases the price of its products and reduces operating expenses. It enhances financial analysis by comparing a company’s financial ratios with those of...
Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost...
Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost of $116,300. The equipment was expected to have a useful life of 7 years and a residual value of $26,000 and is being depreciated on a straight-line basis. On January 1, 2016, the equipment was appraised and determined to have a fair value of $111,860, a salvage value of $26,000, and a remaining useful life of six years. a. Determine the amount of depreciation...
Calculator The Lane Company incurred the following expenditures in January 2016: (1) research and development costs...
Calculator The Lane Company incurred the following expenditures in January 2016: (1) research and development costs of $510,000 that resulted in a new product that was patented during the year, (2) $12,000 in legal fees to have the patent registered, (3) $100,000 in advertising costs to develop a trademark for the newly patented product, (4) Legal fees of $8,000 incurred with the registration of the trademark, which will only be used for five years, and (5) $25,000 of advertising costs...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT