What amount will be charged to profit or loss for the year ended 30th September 2021 in respect of research and development costs?
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- Assoria Plc has $20 million of capitalised development expenditure at cost brought forward at 1 October 2022 in respect of products currently in production. A new project began on 1 October 2022. The research stage of the new project lasted until 31 December 2022 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2023 the directors of Assoria Co became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 2023. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. What amount will be charged to profit or loss for the year ended 30 September 2023 in respect of research and development costs?A company completed development of a product on 31 December 20X0. The development cost was £100 million. Sales commenced on 1 January 20X1, and expected future profits at that date were £60 million (excluding development expenditure). You should assume the life of the product is 5 years with sales and profits spread equally over that period. What is the value of capitalised development expenditure (after amortisation) in the statement of financial position at 31 December 20X1? A. 48 million B. 60 million C. 100 million D. 80 millionDempsey Ltd’s year end is 30 September 2023. Dempsey Ltd commenced the development stage of a project to produce a new pharmaceutical drug on 1 January 2023. Expenditure of $40,000 per month was incurred until the project was completed on 30 June 2023 when the drug went into immediate production. The directors became confident of the project’s success on 1 March 2023. The drug is expected to generate benefits for 5 years. What is the carrying amount of any intangible asset recognised in respect of the project at 30 September 2023 and what is the total amount Dempsey Ltd will charge to profit or loss for the year ended 30 September 2023?
- (ii) Tonson Plc had acquired a machine on 1 January 2020 at a cost of £100,000 with an estimated useful economic life of ten years. The fair value of the machine is £52,000 and the selling costs are £4,000. The expected future cash flows are £10,000 per annum for the next five years. The current cost of capital is 10%. An annuity factor for this rate over this period is 3.791.Required:Prepare extracts from the financial statement for the year-ended 31 December 2020. Show all your workings.Hatch PLC had $20 million of capitalised development expenditure at cost brought forward at 1 October 20X7 in respect of products currently in production and a new project began on the same date. The research stage of the new project lasted until 31 December 20X7 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 20X8 the directors became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 20X8. Capitalised development expenditure is amortised at 20% per annum using the straight line method. What amount will be charged to profit or loss for the year ended 30 September 20X8 in respect of research and development costs? Select one alternative $6,880,000 $8,280,000 $3,800,000 $7,800,000A company had $20 million of capitalised development expenditure at cost brought forward at 1 October 20X7 in respect of products currently in production and a new project began on the same date. The research stage of the new project lasted until 31 December 20X7 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 20X8 the directors became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 20X8. Capitalised development expenditure is amortised at 20% per annum using the straight line method. What amount will be charged to profit or loss for the year ended 30 September 20X8 in respect of research and development costs?
- One of your company's clients has proposed a contract offering an estimated $150,000 in net profits for the next six years; however, your company would be required to invest $585,000 today to acquire the needed resources for the project. Determine whether the project should be accepted if the cost of capital is a. 10% b. 13% c. 16%3. Baboki Ltd are planning to invest in a new project which will cost an initial P375 000 and they expect the following cash.Year Net Cash Profits (P)1 25 0002 55 0003 70 0004 80 0005 40 0006 30 000The investment will be depreciated to a scrap value of P175, 000 over the period of the project. Required: Calculate the Accounting Rate of Return (Return on Capital Employed) of the project.Question: Sufain Limited planning to invest in a project with an initial investment of Rs. 2,000,000. Following is the sales forecast for 5 years of useful life. Cost of Capital 8%. Year Cash Flows (Rs.) 1 600,000 2 750,000 3 960,000 4 1,200,000 5 1,350,000 Required: Net present value (NPV)
- Apply WACC in NPV. Brawn Blenders has the following incremental cash flow for its new project: Category T0 T1 T2 T3 Investment −$4,886,000 Net working capital change −$359,000 $359,000 Operating cash flow $1,731,000 $1,731,000 $1,731,000 Salvage $439,000 Should Brawn accept or reject this project at an adjusted WACC of 9.71%, 11.71%, or 13.71%? Should Brawn accept or reject this project at an adjusted WACC of 9.71%? (Select the best response.) A. The project should be accepted because the NPV is positive. The benefits exceed the costs in today's dollars. B. The project should be rejected because the NPV is negative. The costs exceed the benefits in today's dollars.1. Sun City Ltd commences construction of a multi purpose water park on 1 July 2022 for Pretoria Ltd. Sun City Ltd signs a fixed-price contract for total revenues of $50 million. The project is expected to be completed by the end of 2025 and Pretoria Ltd controls the asset throughout the period of construction. The expected cost as at the commencement of construction is $38 million. The estimated costs of a construction project might change throughout the project – in this example, they do change. The following data relates to the project (the financial years end on 30 June): Particulars 2023($m) 2024 ($m) 2025($m) Costs for the year 10 18 12 Costs incurred to date 10 28 40 Estimated costs to complete 28 12 - Progress billings during the year 12 20 18 Cash collected during the year 11 19 20 Prepare the journal entries for the 2023 financial year, assuming that the measure of progress on the contract cannot be reliably…36 Determine the capitalized cost of a research laboratory which requires P5,000,000 for original construction; P100,000 at the end of every year for the first 5 years and then P147,980 each year thereafter for operating expenses, and P500,000 every 6 years for replacement of equipment with interest at 12% per annum? A. 6,441,350 B. 6,067,015 C. 6,632,445 D. 6,573,650 E. None of the above