Question 2Auckland Co had £3,000,000 of capitalised developmentexpenditure at cost brought forward at 1st October 2020 in respectof products currently in production and a new project began on thesame date.The research stage of the new project lasted until 31st December2020 and incurred £500,000 of costs. From that date the projectincurred development costs of £200,000 per month. On 1st June2021 the directors of Auckland Co become confident that theproject would be successful and yield a profit well in excess of costs.The project will still be in development at 30th September 2021.Capitalised development expenditure is amortised at 10% perannum using the diminishing balance method.What amount will be charged to profit or loss for the year ended30th September 2021 in respect of research and developmentcosts?£1,800,000£1,900,000£1,500,000O £1,300,000

Research and development costs are those costs which has been incurred by the company in order to…

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What amount will be charged to profit or loss for the year ended 30th September 2021 in respect of research and development costs?

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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