Dempsey's year end is 30 September 20X4. Dempsey commenced the development stage of a project to produce a new pharmaceutical drug on 1 January 20X4. Expenditure of $40,000 per month was incurred until the project was completed on 30 June 20X4 when the drug went into immediate production. The directors became confident of the project's success on 1 March 20X4. The drug has an estimated life span of five years; time apportionment is used by Dempsey where applicable. What amount will Dempsey charge to profit or loss for development costs, including any amortisation, for the year ended 30 September 20X4?
Dempsey's year end is 30 September 20X4. Dempsey commenced the development stage of a project to produce a new pharmaceutical drug on 1 January 20X4. Expenditure of $40,000 per month was incurred until the project was completed on 30 June 20X4 when the drug went into immediate production. The directors became confident of the project's success on 1 March 20X4. The drug has an estimated life span of five years; time apportionment is used by Dempsey where applicable. What amount will Dempsey charge to profit or loss for development costs, including any amortisation, for the year ended 30 September 20X4?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dempsey's year end is 30 September 20X4. Dempsey commenced the development stage of a project to
produce a new pharmaceutical drug on 1 January 20X4. Expenditure of $40,000 per month was incurred until
the project was completed on 30 June 20X4 when the drug went into immediate production. The directors
became confident of the project's success on 1 March 20X4. The drug has an estimated life span of five
years; time apportionment is used by Dempsey where applicable.
What amount will Dempsey charge to profit or loss for development costs, including any amortisation, for the
year ended 30 September 20X4?
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