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During 2002, Delta Inc. incurred research and development costs as follows:
Experimental and development costs of a new process patented in December 2002 P250,000
Testing for evaluation of prototypes 300,000
Modification of the formulation of a chemical product 150,000
Research and development costs reimbursable under a contract with Quality Chemicals Corporation 500,000
Problem 1: What amount should Delta report as research and development expense in its income statement for the year ended December 31, 2002?
(a) P 0
(b) P450,000
(c) P700,000
(d) P950,000
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