This year Bauer Corporation incurs the following costs in development of new products: No benefits are realized from the research expenditures until next year.If Bauer Corporation elects to expense the research expenditures,the deduction is
A)$10,000 this year and $175,000 next year.
B)$175,000 next year.
C)$175,000 this year.
D)$215,000 this year.

Question

This year Bauer Corporation incurs the following costs in development of new products:  No benefits are realized from the research expenditures until next year.If Bauer Corporation elects to expense the research expenditures,the deduction is
A)$10,000 this year and $175,000 next year. 
B)$175,000 next year. 
C)$175,000 this year. 
D)$215,000 this year.

Quizplus · Accepted Answer

Since there are no benefits realized from the research expenditures until next year, Bauer Corporation can elect to expense the research expenditures of $175,000 this year. Therefore, the deduction for research expenditures this year is $175,000.

This Year Bauer Corporation Incurs the Following Costs in Development