Wildhorse Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2019, the company expends $325,000 on a research project, but by the end of 2019 it is impossible to determine whether any benefit will be derived from it.
(a) What account should be charged for the $325,000, and how should it be shown in the financial
statements?
(b) The project is completed in 2020, and a successful patent is obtained. The R&D costs to complete
the project are $110,000. The administrative and legal expenses incurred in obtaining patent number
472-1001-84 in 2020 total $16,000. The patent has an expected useful life of 5 years. Record
these costs in journal entry form. Also, record patent amortization (full year) in 2020.
(c) In 2021, the company successfully defends the patent in extended litigation at a cost of $47,200,
thereby extending the patent life to December 31, 2028. What is the proper way to account for
this cost? Also, record patent amortization (full year) in 2021.
(d) Additional engineering and consulting costs incurred in 2021 required to advance the design of
a product to the manufacturing stage total $60,000. These costs enhance the design of the product
considerably. Discuss the proper accounting treatment for this cost.

Management discovers that a supervisor at one of its restaurant locations removes excess cash and resets sales totals throughout the day on the point-of-sale (pos) system. at closing, the supervisor deposits cash equal to the recorded sales on the pos system and keeps the rest. the supervisor forwards the close-of-day pos reports from the pos system along with a copy of the bank deposit slip to the company’s revenue accounting department. the revenue accounting department records the sales and the cash for the location in the general ledger and verifies the deposit slip to the bank statement. any differences between sales and deposits are recorded in an over/short account and, if necessary, followed up with the location supervisor. the customer food order checks are serially numbered, and it is the supervisor’s responsibility to see that they are accounted for at the end of each day. customerchecks and the transaction journal tapes from the pos system are kept by the supervisor for 1 week at the location and then destroyed. what control allowed the fraud to occur?

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Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity. calculate the cost of new stock using the dividend growth approach. what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics. each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings. equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g