The following amounts were spent on development expenses relating to a new product. Assume the capitalization criteria was met on 1 September 20X3, when financing for the project was secured. Assume all costs were incurred evenly over the period, unless otherwise noted. DescriptionAmountProduct development costs (January – August)$98,000Product development costs (September - December)$66,000Employee salaries for development team (January - December)$120,000Brand awareness, and advertising expenses$7,900Interest on loans to finance development (October - December)$12,500 Required:Prepare the journal entries to record the above costs.

As per IFRS, all the expense incurred after meeting the criteria for capitalization are to be…

Answered: Prepare the journal entries to record…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following amounts were spent on development expenses relating to a new product. Assume the capitalization criteria was met on 1 September 20X3, when financing for the project was secured. Assume all costs were incurred evenly over the period, unless otherwise noted.

Description	Amount
Product development costs (January – August)	$	98,000
Product development costs (September - December)	$	66,000
Employee salaries for development team (January - December)	$	120,000
Brand awareness, and advertising expenses	$	7,900
Interest on loans to finance development (October - December)	$	12,500