Questo 44 Not yet answered Marked out of 100 Flag question Read the following two situation and choose the correct option from the following: Situation anet: Tesla Company is developing a prototype wheel chair for physically challenged patients, the product developed is expected to operate using smart phone. Tesla company is predicting a high demand for the product and probability of generating future economic benefit is high. The cost of developing the prototype is within the permits which is at OMR 8 million and feasible for the company Situation two: Cipta LLC is conducting a research to develop a medicine to cure lung cancer the company in its trials is progressing well but the future economic benefits from the research could not be ascertained properly. The company spent around OMR 23 million on the project. The duration of its commercialization is unknown. If the project is a successful then this could be a breakthrough in science and development The 8 million cost in situation one can be capitalized by tesla company and the cost of 23 million in situation two is also capitalized by Cipla LLC The 8 million cost in situation one cannot be capitalized by tesla company and the cost of 23 million in situation two is charged to profit and loss of Cipla LLC The 8 million cost in situation one is charged to profit and loss by tesla company and the cost of 23 million in situation two is also charged to profit and loss of Cipla LLC The 8 million cost in situation one can be capitalized by tesla company and the cost of 23 million in situation two is charged to profit and loss of Cipla LLC Questo 37 Not yet wered Marked out of 1.00 Fag question On June 2020. Al Kabir real estate LLC purchased a 30 acres open land for a cost price of OMR 280.000. The comparty incurred OMR 120,000 on dividing the 30 acres land into smaller plots, developed with electricity, gas & water facilities, and completed to be sold to customers. An assessment of the current value of the land and property was now valued at OMR700,000. Even though there was no sale of plots by the company, it recognized OMR 420,000 as revenue deducting relevant expenses of OMR 120,000 arriving at a net income of OMR 300,000. Which of the following statement is appropriate to the above case? The accounting treatment is appropriate as there is a gain the value of land and this treatment can only be valid if transaction details are supported by supplementary notes As per qualitative characteristics stated under conceptual framework the accounting treatment and recognition of net income is not appropriate The above accounting treatment is appropriate with proper disclosures in the supplementary notes The accounting treatment is appropriate as there is a gain the value of land