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Bill Co. made the following expenditures during the current year:
Costs to develop computer software for use in Brill’s general mgmt information system: $100,000
Costs of market research activities: $75,000
What amount of these expenditures should Brill report in its current year income stmt as R&D expense under GAAP?
A.$175,000
B.$100,000
C.$75,000
D.$0
Correct Answer: D
I’m confused on this. Shouldn’t the answer be B, $100,000? I understand market research activities aren’t R&D and thus don’t qualify for R&D expense. However, computer software developed for internal use are expensed until feasibility is established and capitalized after over product life.
Am I missing something?
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