Jameson Limited was involved in a mining exploration business. It commenced a project to design more efficient opal detecting equipment. The following expenditures occurred during the financial year ended 30 June 2022: researcher's salary $50 000; research consumables $30 000; re-development of the detecting equipment $40 000; final adjustments to the detecting equipment $12 500. The amount to be capitalised by this company as an intangible asset, for the 2022 financial year, is:
A) $80 000
B) $90 000
C) $12 500
D) $52 500

Question

Quizplus · Accepted Answer

The amount to be capitalised is the cost of the research and development that has been successful, which is the cost of the final adjustments to the detecting equipment.

Jameson Limited Was Involved in a Mining Exploration Business