During the current year, Orr Company incurred the following costs:
|
Research and development services performed by Key Corp. for Orr
|
$
|
150,000
|
|
Design, construction, and testing of preproduction prototypes and models
|
|
200,000
|
|
Testing in search for new products or process alternatives
|
|
175,000
|
In its income statement for the current year, what amount should Orr report as research and development expense?
$150,000
$350,000
$200,000
$525,000