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sir can you help me with this questions and its steps.
Delta Co has capitalized development costs bought forward of $420,000 at 1 January 2009. These costs have a remaining useful life of 4 years.
During the year ended 31 December 2009, the following expenditure has been incurred on Project A.
$
Development Costs 65,000
Research costs 25,000All research and development was completed in july 2009 on project A and Delta Co commenced production during the month. Delta Co applies IAS 38 Intangible assets guidance on capitalization of relevant costs. An amortization period of 4 years is deemed appropriate. Delta Co’s policy is to charge a full year’s amortization in the year of capitalization of a project.
What should be the total amortization expense be for the year ended 31 December 2009?
A.$121,250
B.$105,000
C.$126,750
D.$143250The brought forward figure is 420,000.
This year there is extra 65,000 to capitalise (the development costs). These have a full years charge in the year of capitalisation.
Everything is to be amortised over 4 years.
So…..all you need to is take the total and divide by 4.
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