Measurement of E&E assets    LO4, 5, 6 During the year ended 30 June 2020, Resources Ltd explored four different areas of interest and spent $100 000 in each. The results of E&E activities suggested that Areas A, B and C may contain mineral reserves so the company acquired leases over these three areas. The leases cost $150 000, $220 000 and $180 000 respectively. During the year ended 30 June 2021, Resources Ltd commenced a drilling program to evaluate Areas A, B and C. Eight exploratory wells were drilled, five in Area A, two in Area B and one in Area C at a cost of $120 000 each. The five wells drilled in Area A did not result in any mineral resource findings (i.e. they were dry holes). The two wells drilled in Area B indicated that the company had discovered economically recoverable reserves. Management was uncertain about the likelihood of finding economically recoverable reserves for the well in Area C as some mineral reserves were found but not enough to be considered economically recoverable at this stage. Therefore, Resources Ltd decided to continue E&E activities in Area C as of 30 June 2021. Area A was abandoned, and, after incurring costs of $50 000 to confirm the technical feasibility and commercial viability of extracting the mineral resources, development of Area B commenced. During the year ended 30 June 2022, to evaluate the area of interest further, three more wells were drilled in Area B. Of these, two were dry. Each well cost $140 000. The successful wells in Area B were developed for a total cost of $300 000. Expenditure on additional plant and equipment related to development was $325 000. After further dry wells costing $175 000 were drilled in Area C, management concluded that Area C did not contain any commercially viable quantities of mineral resources, so it was abandoned. These costs are summarised as follows. Costs incurred for each area of interest A B C D Total 30/06/2020 Exploration 100 000 100 000 100 000 100 000 400 000 Leases 150 000 220 000 180 000 — 550 000 30/06/2021 Dry wells 600 000 — — — 600 000 Other wells — 240 000 120 000 — 360 000 Technical feasibility/ commercial viability costs — 50 000 — — 50 000 30/06/2022 Dry wells — 280 000 175 000 — 455 000 Other wells — 140 000 — — 140 000 Development — 300 000 — — 300 000 PPE — 325 000 — — 325 000 Total 850 000 1 655 000 575 000 100 000 3 180 000 Required Determine what amounts would be recognised as an expense in the profit or loss versus capitalised as an asset, in relation to each area of interest for each financial year assuming Resources Ltd: 1. expenses all of its E&E costs as incurred 2. capitalises all E&E costs on an area of interest basis 3. capitalises successful E&E costs on an area of interest basis (i.e. expenses dry holes).