Question

Heller Co. incurred the following costs in 2005:

Research and development services performed by Kay Corp. for Heller
$150,000
Testing for evaluation of new products
125,000
Laboratory research aimed at discovery of new knowledge
185,000
What amount should Heller report as research and development costs in its income statement for the year ending December 31, 2005?
A. $125,000
B. $150,000
C. $335,000
D. $460,000

Answer 1

D

Explanation:

Wee have research and development costs:

$150,000 + $185,000 = $335,000 + $125,000 =TOTAL $460,000

Testing for evaluation of new products can be considered since these new products are results from the research and development done by Heller Co.