Pharoah Company incurred the following costs during the current year in connection with its research and development activities.
Cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years (uses straight-line depreciation) - $282,500
Materials consumed in R&D projects - $55,500
Consulting fees paid to outsiders for R&D projects - $115,000
Personnel costs of persons involved in R&D projects - $125,000
Indirect costs reasonably allocable to R&D projects - $45,500
Materials purchased for future R&D projects - $32,500
Compute the amount to be reported as research and development expense by Pharoah on its current year income statement. Assume equipment is purchased at the beginning of the year.