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50 Further information is as follows. 1. The allowance of doubtful debts was LKR 300,000/at 1 of January 2017, LKR 250,000 at 31 December 2017

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50 Further information is as follows. 1. The allowance of doubtful debts was LKR 300,000/at 1" of January 2017, LKR 250,000 at 31" December 2017 and LKR 350,000 at 315t December 2018. 2. Research and development costs of LKR 500,000 were incurred during each of the years 2017 and 2018 on project Z. These costs were expensed in the income statement as they did not meet the requirements of financial reporting standards for capitalization project Z not complete yet. 3. At the end of 2016 the company had completed another research and development project. Project X. Total expenditure on this project has been LKR 1,500,000 none of which been capitalized in the financial statements. The product developed by project X was on sale on 1" January 2017 and the product was a great success. The product's life cycle was only two years. So no further sales of the product are expected after 31 December 2018. 4. The company incurred non-cash expenses of LKR 15,000 in both years. 5. Capital employed (equity plus debt) per the statement of financial position was LKR.33, . 500 at 1 January 2017, and LKR.37, 000 at 1 January 2018. 378 6. Cost of Capital 2018 9.9% and 2017 8.7% 1180 There was no provision for deferred tax. EVA 2017 = NOPAT - [ R X C ] 5 6 3 5002 - 5 8.7 % X 31

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