Sunland Company incurred the following costs during the current year in connection with its research and development activities. Cost of equipment acquired that will have alternative
uses in future R&D projects over the next 5 years (uses straight-line depreciation) $283,500
Materials consumed in R&D projects 55,700
Consulting fees paid to outsiders for R&D projects 117,000
Personnel costs of persons involved in R&D projects 137,500
Indirect costs reasonably allocable to R&D projects 45,700
Materials purchased for future R&D projects 32,700

Required:
Compute the amount to be reported as research and development expense by Sunland on its current year income statement. Assume equipment is purchased at the beginning of the year.

Sunland Company

The amount to be reported as research and development expense by Sunland on its current year income statement is:

= $412,600

Explanation:

a) Data and Calculations:

Cost of equipment acquired that will have alternative

uses in future R&D projects over the next 5 years (uses straight-line depreciation) $283,500

Materials consumed in R&D projects 55,700

Consulting fees paid to outsiders for R&D projects 117,000

Personnel costs of persons involved in R&D projects 137,500

Indirect costs reasonably allocable to R&D projects 45,700

Materials purchased for future R&D projects 32,700

R&D Expenses for the year:

Depreciation of equipment ($283,500/5)                      $56,700

Materials consumed in R&D projects                               55,700

Consulting fees paid to outsiders for R&D projects       117,000

Personnel costs of persons involved in R&D projects  137,500

Indirect costs reasonably allocable to R&D projects      45,700

Total R&D costs for the current year =                       $412,600

answer; property tax payment made in july and december;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.