Stam Co. incurred the following research and development project costs during the current year: | |
|---|
| Equipment purchased for current and future projects | $ 100,000 | | Equipment purchased for current projects only | 200,000 | | Research and development salaries for current projects | 400,000 | | Legal fees to obtain patent | 50,000 | | Material and labor costs for prototype product | 600,000 |
The equipment has a five-year useful life and is depreciated using the straight-line method. What amount should Stam recognize as research and development expense at year end under U.S. GAAP?
|
a. | $1,000,000 | |
b. | $1,220,000 | |
c. | $450,000 | |
d. | $1,350,000 |
|
