Glass 4 Windows Is Involved in a Research and Development $$\begin{array} { | l | l | } \hline \text { Research } & \$ 235000 \\\hline \text { Development costs } & \$ 350000 \\\hline\end{array}$$

question 1

Multiple Choice

Glass 4 Windows is involved in a research and development project to create a filtering window that removes the need for curtains.For the current year ended 30 June 2011 expenditure on the project is as follows: $$\begin{array} { | l | l | } \hline \text { Research } & \$ 235000 \\\hline \text { Development costs } & \$ 350000 \\\hline\end{array}$$ The window is expected to earn revenues of $70 000 per year for the 10 years commencing 1 July 2011.Assuming straight-line amortisation,how much of the research and development cost should be expensed this period and what amount should be amortised in the year ended 30 June 2014?

• A) Expensed in 2011: $58 500; amortisation in 2014: $58 500
• B) Expensed in 2011: $235 000; amortisation in 2014: $35 000
• C) Expensed in 2011: $235 000; amortisation in 2014: $28 000
• D) Expensed in 2011: $350 000; amortisation in 2014: $23 500