Question

Last year, XYZ Corporation incurred the following expenditures in the development of a new plant process:

Salaries $250,000
Materials 90,000
Utilities 20,000
Quality control testing costs 40,000
Management study costs 5,000
Depreciation of equipment 18,000 ​
During the current year, benefits from the project began being realized in May. If XYZ Corporation elects a 60 month deferral and amortization period, determine the amount of the deduction for the current year.

Answer 1

$50,400

Step-by-step explanation:

Amount

Salary $250,000

Materials $90,000

Utilities $20,000

Depreciation $18,000

Research and experimental costs $378,000

Current deduction = $378,000/60 * 8(May-December)

Current deduction = $50,400