Test: CPA Financial Accounting and Reporting (FAR)

1.

Coleman Inc produces software for sale and internal use. In the current year, Coleman incurred the following costs: research & development costs outsourced to a third party of $30,000; design and testing of preproduction prototypes of $110,000; testing in search for new products of $15,000; and quality control costs of $18,000. What amount of costs should be expensed as research & development in the current year?

$155,000

$188,000

$140,000

$173,000

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