As at 31 December 2020, Aura Plc has a development asset on its Statement of Financial Position of £378,000 in respect of Project Alpha. Project Alpha commenced on 1 July 2020 and costs have been incurred evenly since that date. All costs have been capitalised since 1 July 2020. When reviewing the financial statements ahead of year end, it was discovered that this project was only determined to be commercially viable from 1 August 2020. Which journal entry is required to correct the financial statements of Aura Plc for the year ended 31 December 2020?
As at 31 December 2020, Aura Plc has a development asset on its
of Financial Position
commenced on 1 July 2020 and costs have been incurred evenly since that
date. All costs have been capitalised since 1 July 2020.
When reviewing the financial statements ahead of year end, it was discovered
that this project was only determined to be commercially viable from 1 August
2020.
Which
for the year ended 31 December 2020?
a) DEBIT Research costs- Income statement £63,000
CREDIT Intangible assets £63,000
b) DEBIT Research costs- Income statement £31,500
CREDIT Intangible assets £31,500
c) DEBIT Intangible assets £63,000
CREDIT Research costs- Income statement £63,000
d) DEBIT Research costs- Income statement £315,000
CREDIT Non-current assets £315,000
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