part 1c

c) Recently Joyland co ltd has been engaged in research and development work for several products that will be profitable to increase the revenue base of the company. The research stage of one of the new project lasted until 30th June 2021 and incurred Shs. 300 million of costs. From that date the project incurred development costs of Shs. 25 million per month. On 1st October 2021 the directors became confident that the project would be successful and yield a profit well in excess of its costs, before this date the management were in doubt of the success of the project. The project is still in development at 31 March 2022. Capitalized development expenditure is amortized at 20% per annum using the straight-line method. All expensed research and development is charged to cost of sales. Required: (1) Per the requirements of IAS 38 "intangible assets" discuss when the development costs should be treated as an expense or capitalized as an asset. (4 marks) Calculate the amounts which should appear in the statement of profit or loss and statement of financial position in respect of the information above for the year ended 31 March 2022. (4 marks) 11 tauch