A company recorded $10m of development costs as at 31 December 2018. The company expects the net profit of this newly developed product to be $15m over four years. 30% of this profit is expected to be earned in 2019, 30% in 2020, 20% in 2021 and balance in 2022. The amortisation amount for 2019 and 2020 is: Question 7 options: 1) $2.5m for both years 2) $3.0m for both years 3) $4.0m for both years 4) $4.0m and 5.0m respectively
A company recorded $10m of development costs as at 31 December 2018. The company expects the net profit of this newly developed product to be $15m over four years. 30% of this profit is expected to be earned in 2019, 30% in 2020, 20% in 2021 and balance in 2022. The amortisation amount for 2019 and 2020 is: Question 7 options: 1) $2.5m for both years 2) $3.0m for both years 3) $4.0m for both years 4) $4.0m and 5.0m respectively
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 26CE
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A company recorded $10m of development costs as at 31 December 2018. The company expects the net profit of this newly developed product to be $15m over four years. 30% of this profit is expected to be earned in 2019, 30% in 2020, 20% in 2021 and balance in 2022. The amortisation amount for 2019 and 2020 is:
Question 7 options:
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