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Assessing Research and Development Expenses Abbott Laboratories reports the following income statement, in...

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Accounting

Assessing Research and Development Expenses

Abbott Laboratories reports the following income statement, in partial form ($ millions):

Year ended December 31 2014
Net sales $23,024
Cost of products sold 10,663
Amortization of intangible assets 643
Research and development* 1,570
Selling, general and administrative 6,843
Total operating cost and expenses 19,719
Operating earnings $3,305

* including acquired in-process and collaborations R&D

a. Compute the percent of net sales that Abbott Laboratories spends on research and development (R&D).

Round answer to one decimal place (i.e., 0.1426 = 14.3%)

Answer%

b. Using the financial statement effects template, describe how the accounting for R&D expenditures affects Abbott Laboratories' balance sheet and income statement.

Enter answers in millions, as shown above. Use negative signs with answers, when appropriate.

Transaction Cash Asset + Noncash Assets - Contra Assets = Liabilities + Contr. Capital + Earned Capital Revenue - Expenses = Net income
R & D expenditures Answer Answer Answer Answer Answer Answer Answer Answer Answer

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