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The Financial year end for Boscobel Limited is the 30th of September. On 1 January...

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Accounting

The Financial year end for Boscobel Limited is the 30th of September. On 1 January 2018 Toshiba Pharmaceutical Limited (TPL) started research into the production of a new pharmaceutical drug and spent $30,000 per month upon until 31 December 2018.The company commenced the development stage of the project to produce the new pharmaceutical drug on 1 January 2019. Expenditure of $60,000 per month was incurred until the project was completed on 30 June 2019, when the drug went into immediate production. The directors became confident of the projects success on 1 March 2019. The drug has an estimated life span of five years; time apportionment is used by TPL where applicable.

REQUIRED: i. Calculate the amount TPL should charge to the Statement of Comprehensive Income for the years 2018 and 2019 as it relates to the above project.

ii. Calculate the amount to be recorded on the Statement of Financial Position for the years 2018 and 2019.

(C) List and explain three conditions that must be fulfilled before a development expenditure can be capitalized.

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