Research and Development question, to calculate the research and development expenditure recognized in 2012, short Paragraphs can be written to support the calculations for the R & D expenditure Recognized in 2012.

Kelly Ltd is currently working on four research and development projects. Summarised data relating to each project's expenditure and recoverable amount is provided below. Project Alpha R & D expenditure Expected revenue inflows Beta R & D expenditure Expected revenue inflows Gamma R & D expenditure Expected revenue inflows Delta R & D expenditure Expected revenue inflows Actual ($000) Actual ($000) Budgeted ($000) Budgeted ($000) Budgeted ($000) 2011 2012 2013 2014 2015 75 75 100 100 0 50 50 50 0 0 200 200 350 0 0 0 0 500 1250 500 1500 500 250 0 0 0 0 1750 1750 750 0 1500 0 0 0 0 0 500 250 250 All revenue and expenditure predictions are deemed to be 'probable'. A discount rate of 6 per cent is used. In relation to the specific projects, the following information is also available: Project Alpha This project involves the compilation of all known information about the abrasive natures of different types of sea weed. The revenue inflows of $50,000 per year are being provided by a major shipping company. Project Beta This project relates to the ultimate development of a surfboard that will allow surfers to do more radical manoeuvres. Fifty per cent of the expenditure in 2011 was considered to represent research, while the balance of the related expenditures represents development. Project Gamma This project involves the development of a wetsuit with a rechargeable heat-pack. Initially, surfers rejected the concept because they believed it would create pain because of small electric shocks, and sales prospects looked poor. However, in 2012, surfers changed their minds and large-scale demand for the product was created. Only $250,000 of the expenditure in 2011 was deemed to represent research and the balance of all other expenditure was deemed to be development. Project Delta This project involved the development of a new wrist watch that predicts the height of waves. $250,000 has been spent on research and the balance on development. It is expected that only $1,000,000 will be recoverable. Required: Determine how much research and development expenditure should be deferred as at the end of 2012