During the year ended 30 June 2020, Emily Ltd spent $300,000 on the development of a new range of garden machinery. In order to carry out this work, Emily purchases some highly specialized equipment, on 1 July 2019 at a cost of $100,000. The equipment is expected to have a useful life of five years and is to be depreciated over that period by the straight-line method. At 1 July 2019, all six criteria to capitalise development costs were fully safisified. Required: According to HKAS 38 ‘Intangible Assets’, what is the maximum amount that Emily can carry forward as development costs as at 30 June 2020? A. $300,000 B. $320,000 C. $100,000 D. $400,000
During the year ended 30 June 2020, Emily Ltd spent $300,000 on the development of a new range of garden machinery. In order to carry out this work, Emily purchases some highly specialized equipment, on 1 July 2019 at a cost of $100,000. The equipment is expected to have a useful life of five years and is to be depreciated over that period by the straight-line method. At 1 July 2019, all six criteria to capitalise development costs were fully safisified. Required: According to HKAS 38 ‘Intangible Assets’, what is the maximum amount that Emily can carry forward as development costs as at 30 June 2020? A. $300,000 B. $320,000 C. $100,000 D. $400,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During the year ended 30 June 2020, Emily Ltd spent $300,000 on the development of a new range of garden machinery. In order to carry out this work, Emily purchases some highly specialized equipment, on 1 July 2019 at a cost of $100,000. The equipment is expected to have a useful life of five years and is to be
Required: According to HKAS 38 ‘Intangible Assets’, what is the maximum amount that Emily can carry forward as development costs as at 30 June 2020?
| A. |
$300,000 |
|
| B. |
$320,000 |
|
| C. |
$100,000 |
|
| D. |
$400,000 |
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