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Space Tech Inc. had the following expenditures this year related to a new product it was developing: Research cost for the new design - $2,200,000 Development cost of the new product (after technological feasibility and product viability is established) - $800,000 Legal and filing fees for a patent for the new design - $100,000 The product was patented before the end of the year. Required: Under GAAP, how much is Space Tech required to expense with respect to the project

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jepessoa

Answer:

$2,200,000

Explanation:

all research and development costs incurred before a new product or service is technological feasible must be expensed. The costs incurred afterwards may be capitalized.

Expensed costs = $2,200,000

Capitalized costs = $800,000 + $100,000 = $900,000

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