Problem 7-40 (LO. 5) Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2018. Blue had the following expenses in connection with the project: Salaries Materials Insurance Utilities Cost of inspection of materials for quality control Promotion expenses Advertising Equipment depreciation Cost of market survey 2018 2019 $500,000 $600,000 90,000 8,000 6,000 7,000 11,000 2018 0 15,000 8,000 a. The new product will be introduced for sale beginning in July 2020. Determine the amount of the deduction for research and experimental expenditures for 2018, 2019, and 2020. If an amount is zero, enter 0. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 70,000 11,000 8,000 6,000 18,000 20,000 14,000 2019 2020

Problem 7-40 (LO. 5) Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2018. Blue had the following expenses in connection with the project: Salaries Materials Insurance Utilities Cost of inspection of materials for quality control Promotion expenses Advertising Equipment depreciation Cost of market survey 2018 2019 $500,000 $600,000 90,000 8,000 6,000 7,000 11,000 2018 0 15,000 8,000 a. The new product will be introduced for sale beginning in July 2020. Determine the amount of the deduction for research and experimental expenditures for 2018, 2019, and 2020. If an amount is zero, enter 0. If Blue Corporation elects to expense the research and experimental expenditures, what will the amount of the deduction be? 70,000 11,000 8,000 6,000 18,000 20,000 14,000 2019 2020

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 40P

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