Following are the 2016 income statements for Apple Inc. and Microsoft Corporation, competitors in the computer industry. Use these financial statements to answer the required.
Continued next page
Required:
a. How do Apple Inc. and Microsoft Corporation account for R&D expenditures?
b. Apple Inc.'s and Microsoft Corporation's R&D expense includes many different types of costs. List three specific costs included in R&D expense on the income statement.
c. Compare R&D expenses of the two companies. (Hint: determine the common-size R&D amounts. Consider both direct R&D expenses as well as acquired R&D.)
d. What trend do you notice in the R&D expenses of each company over time?

Question

Following are the 2016 income statements for Apple Inc. and Microsoft Corporation, competitors in the computer industry. Use these financial statements to answer the required.
  Continued next page
  Required: 
a. How do Apple Inc. and Microsoft Corporation account for R&D expenditures?
b. Apple Inc.'s and Microsoft Corporation's R&D expense includes many different types of costs. List three specific costs included in R&D expense on the income statement.
c. Compare R&D expenses of the two companies. (Hint: determine the common-size R&D amounts. Consider both direct R&D expenses as well as acquired R&D.)
d. What trend do you notice in the R&D expenses of each company over time?

Quizplus · Accepted Answer

The Answer of Following are the 2016 income statements for Apple Inc. and Microsoft Corporation, competitors in the computer industry. Use these financial statements to answer the required.
  Continued next page
  Required: 
a. How do Apple Inc. and Microsoft Corporation account for R&D expenditures?
b. Apple Inc.'s and Microsoft Corporation's R&D expense includes many different types of costs. List three specific costs included in R&D expense on the income statement.
c. Compare R&D expenses of the two companies. (Hint: determine the common-size R&D amounts. Consider both direct R&D expenses as well as acquired R&D.)
d. What trend do you notice in the R&D expenses of each company over time?

Following Are the 2016 Income Statements for Apple Inc