Storage Tek capitalizes certain software development costs. Because firms outside of the computer industry expense all their research and development costs, Storage Tek’s financial statements may not be comparable to those of firms in other industries. In 1997, Storage Tek reported the following results (dollars in thousands):
|
Income before taxes |
$316,117 |
|
Provision for income taxes |
84,300 |
|
Net income |
$231,817 |
Required
Recalculate Storage Tek’s net income to reflect the immediate expensing of all software development costs.