Given Below Are Costs Incurred by Bunker Company During 2017 $31,2018$

question 138

Essay

Given below are costs incurred by Bunker Company during 2017 and 2018.Bunker follows the policy of decreasing the Intangible Asset account directly as amortized.
Research was conducted to discover a new product and costs of $200,000 in 2017 and $80,000 in 2018 were incurred.After several months,a product was created and a patent secured for a cost of $150,000,effective as of July 1,2018.The company expects to have increased revenues of $500,000 over the next several years.The patent is expected to be useful for the next ten years.
A. Prepare a partial income statement for the year ended December $31,2018$ .

B. How should the $\$ 80,000$ cost incurred in 2018 be reported on the financial statements?

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Definitions:

1640

A year known for the beginning of the English Civil War, a period of armed conflict and political machinations between Parliamentarians and Royalists.

Roger Williams's Banishment

The expulsion of Roger Williams, a religious leader and advocate for the separation of church and state, from the Massachusetts Bay Colony in 1636, leading to the founding of Rhode Island.

Massachusetts Bay

A region and colony in the early United States, centered around the bay of the same name, known for its role in the Puritan migration and the early development of American democracy.

Church and State

The concept or legal principle concerning the separation of religious institutions and government entities, aiming to prevent any single religion from dominating public policy or government functions.