1. S-Pilot Company incurred the following costs during 2016:
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Design of tools, jigs, molds and dies involving new Technology
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$250,000
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Modification of the formulation of a process
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320,000
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Troubleshooting in connection with breakdowns during commercial production
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200,000
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Adaption of an existing capability to a particular customer's need as Part of a continuing commercial activity
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220,000
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In its 2016 income statement, what expense should S-Pilot report for research and development?
2. Alton Inc. purchased equipment for $20,000 on January 1, 2015. The estimated useful life is 5 years and the residual at the end of the five years is $2,000. Alton uses the double-declining balance depreciation method. What will be the carrying value (book value) at December 31, 2017?
3. A Company on January 1, 2017 purchased B Company at a cost that resulted in recognition of goodwill of $300,000. During the first quarter of 2017, A Company spends an additional $120,000 on expenditures designed to maintain goodwill. In its December 31, 2017 balance sheet, what amount should A Company report as goodwill?
4. Assume a corporation has a cash surrender value of $20,000 at the beginning of the year. During the year, a premium of $100,000 is paid, and the cash surrender value at the end of the year is $32,000.
Required: Record the entry for the premium payment.