PLEASE ANSWER AND CHOOSE THE CORRECT ANSWER FOR THIS 3
What is the carrying value of the development expenditure on December 31, 2012? * Booster Company has been researching into new ways of manufacturing their products. The costs and results of a recent project are as follows. Period Costs Description 2010 P 6,000,000 2011 January to June General research 9,000,000 Development stage 1 2011 July to December 14,000,000 Development stage 2 2012 nil New process adopted in the factory Development began in January 2011, but it was only in July 2011 that it became apparent that the process would be successful and that it would save the company a lot of money. The new process will probably be used for ten years from January 2012, saving about P4,000,000 per annum. The process is protected by patent for seven years, after which time most of Booster's rivals will adopt the process. What is the carrying value of the development expenditure on December 31, 2011? P 14,000,000 P 29,000,000 P 9,000,000 P 23,000,000What is the carrying amount of the biological asset on December 31, 2011? * Salve Company is engaged in raising diary livestock. Information regarding its activities relating to the dairy livestock is as follows: Carrying amount on January 1, 2011 Increase due to purchases 5,000,000 2.000,000 Gain arising from change in fair value less cost to sell attributable to price change 400,000 Gain arising from change in fair value less cost to sell attributable to physical change 600,000 Decrease due to sales 850,000 Decrease due to harvest 200,000 What is the carrying amount of the biological asset on December 31, 2011? 6,950,000 O 6,000,000 O 8,000,000 7,150,000 What is the fair value of biological assets on January 1, 2011? Farmland Company produces milk on its farms The entity p y produces 20% communities milk thedis conenmad EWhat total amount of costs Eccentric Company should recognize as expense during the research stage? * Eccentric Company provides engineering and operational support services to aircraft manufacturers. Eccentric Company received a confirmed order from a well known aircraft manufacturer to develop new designs for ducting the air-conditioning of their aircraft. For this project, Eccentric Company needed funds aggregating to P1,000,000. It was able to convince venture capitalists and was able to obtain funding of P1,000,000. The following expenditures were incurred by Eccentric Company is pursuance of its research and development project, in chronological order: January 2, 2010 Paid P175,000 toward salaries of the technicians (engineers and March 15, 2010 consultants) Incurred P250,000 toward cost of developing for revising the duct July 15, 2010 and producing the test model. Paid an additional P300,000 for revising the ducting process to Sept. 15, 2010 ensure that product could be introduced in the market. Developed, at a cost of P80,000, the first model (prototype) and Oct. 31, 2010 tested it with the air-conditioners to ensure its compatibility. A focus group of other engineering providers was invited to a conference for introduction of this new product. Cost of the conference aggregated to P50,000. Dec, 15, 2010 The development phase was completed and a cash flow budget was prepared. Net profit for the year 2010 was estimated to equal P900,000. What total amount of costs Eccentric Company should recognize as expense during the research stage? P805,000 P725,000 O P775,000 O P855.000
