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Health Ltid incurred expenciture researchirig and developing a cure for a common dsease found in turnips. At the end of 2021 management determined that the

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Health Ltid incurred expenciture researchirig and developing a cure for a common dsease found in turnips. At the end of 2021 management determined that the research and development project was unlkely to succeed because trials of the prototype had been unsuccestsfu in 2022 a breakthrough in acricullural sclence improved the chances of the . product succeeding and development resumed. The project was completed in 2022 . At the end of 2022 costs incurred on the projoct were expected to be recoverable. Healit Lid expects that 15 per oent of the projected revenue will be recelved in 2023, 25 per cent in 2024, 30 per cent in 2025,20 per cent in 2026 and 10 per cent in 2027- Afer five years the product wa be at the end of its useful ilfe because the dsease found in turips will have been eradicated. Coots incuired were as follows REQUIRED: 1. How much research expenditure and development expenditure should be recognised as an expense in 2021 and 2022 ? (0.5 Marks) 2. Assume that after charging amortisation based on sales rovenue at the end of 2022 the fiscounted net cash fows expected to be generated from the deferred expendare wore estimated as $15.700. Prepare any journal entries required to account for this intormation. (0.5 Marks) Health Ltid incurred expenciture researchirig and developing a cure for a common dsease found in turnips. At the end of 2021 management determined that the research and development project was unlkely to succeed because trials of the prototype had been unsuccestsfu in 2022 a breakthrough in acricullural sclence improved the chances of the . product succeeding and development resumed. The project was completed in 2022 . At the end of 2022 costs incurred on the projoct were expected to be recoverable. Healit Lid expects that 15 per oent of the projected revenue will be recelved in 2023, 25 per cent in 2024, 30 per cent in 2025,20 per cent in 2026 and 10 per cent in 2027- Afer five years the product wa be at the end of its useful ilfe because the dsease found in turips will have been eradicated. Coots incuired were as follows REQUIRED: 1. How much research expenditure and development expenditure should be recognised as an expense in 2021 and 2022 ? (0.5 Marks) 2. Assume that after charging amortisation based on sales rovenue at the end of 2022 the fiscounted net cash fows expected to be generated from the deferred expendare wore estimated as $15.700. Prepare any journal entries required to account for this intormation. (0.5 Marks)

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