Financial Accounting

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Imact of Profits on Spending for Research & Development


A computer company has \$2,700,000 in research and development costs. The potential useful life is not known but could be a legal patent (20 years) if the project is successful. Before recording these costs, the net income of the company is \$2,000,000.

What is the amount of net income or loss after these R & D costs are accounted for?