Nonmonetary Exchange

Question 1

R&D Costs expensed

Answer 1

1. Equipment that has no other use
2. Labor and materials
3. Cost of testing
4. Planning costs
5. Design of software

• Legal costs to file and defend patent capitalized
• Packaging and anything after technological feasibility capitalized

Question 2

Net capitalized costs

Answer 2

600,000 total costs * .10 expectations = 60,000
Straight line = 600,000 / 4 = 150,000 = greater
600,000 - 150,000 = 450,000 = less than NRV 480,000