Transaction/event 6: Development expenditure (5 marks) In addition to the Transaction/events that have occurred during the year, the CEO would like you to provide some accounting advice on some proposed future expenditure. Specifically, Surf Ltd is considering commencing a project to develop a modified road surfacing machine to use in locations with unstable soil. For the project, the budgeted costs are expected to be as follows: $50,000 on studies into soil geology and inefficiencies of currently available machines $180,000 on salaries of technical staff to formulate several alternative machine designs. $60,000 on salaries of technical staff to refine the designs of the chosen machine. $700,000 to construct and test a small-scale prototype of the machine. If the protype is successful Surf Ltd expects that it will require: - $10,000 in legal fees to register the patent of the chosen machine design - $1,500,000 to construct the full-scale machine to use in the business Required: Describe how the budgeted costs for the project will be treated for accounting purposes. Specifically, you should also identify, provide and discuss the applicable accounting standard(s) for the events/transactions relate as part of your response