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How much research and development cost should be expensed

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Question - Glass 4 Windows is involved in a research and development project. For the current year ended 30 June 2016 expenditure on the project is as follows:

Research 235 000

Development 350 000

The project is expected to earn revenues of $30 000 per year for the 10 years commencing 1 July 2016. How much of the research and development cost should be expensed in 2016 and what amount should be amortised in the year ended 30 June 2019? Glass 4 used a discount rate of 8 per cent.

Reference no: EM132559292

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