Innovator Ltd incurred expenditure researching and developing a cure for a common disease found in turnips. At the end of 2013 management determined that the research and development project was unlikely to succeed because trials of the prototype had been unsuccessful. During 2014 a breakthrough in agricultural science improved chances of the product succeeding and development resumed. The project was completed in 2014. At the end of 2014, costs incurred on the project were expected to be recoverable. Innovator expects that 10% of the project revenue will be received in 2015, 20% in 2016, 30% in 2017, 30% in 2018 and 10% in 2019. After five ytars the product will be at the end of its useful life because the disease found in turnips will have been eradicated. Costs incurred were as follows: 2013 2014 Research ($) 44,000 12,800 Development ($) 10,800 64,000 Required: (a) How much research expenditure and development expenditure should be recognized as an expense in 2013? (b) How much research expenditure and development expenditure should be recognized as an expense in 2014? (C) How much expenditure should be carried forward and reported in the statement of financial position (SOFP) at the end of 2013 and 2014? (d) Prepare journal entries in 2015 and 2016 for the amortization of expenditure that is carried forward, assuming that actual revenues are as expected. How much expenditure will be carried forward and reported in the SOFP at the end of 2015 and 2016? (e) Assume that after charging amortization based on sales revenue at the end of 2017, the discounted net cash flows expected to be generated from the capitalized development expenditure were estimated as $15,000. Prepare any journal entries required to account for this information