Wojtowicz Limited Was Involved in a Mining Exploration Business

question 23

Multiple Choice

Wojtowicz Limited was involved in a mining exploration business.It commenced a project to design more efficient gold detecting equipment.The following expenditures occurred during the financial year ended 20X1: Researcher's salary $5000 Research consumables $3000 Re-development of the detecting equipment $4000 Final adjustments to the detecting equipment $2500.The amount to be capitalised by this company as an intangible asset,for the 20X1 financial year,is:

• A)$6500
• B)$8000
• C)$11 500
• D)$14 500.

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Definitions:

Fair Value Option

The Fair Value Option is an accounting option that allows companies to measure selected financial assets and liabilities at fair value, aiming to provide more relevant financial information.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace.

IFRS

International Financial Reporting Standards; a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.

Equity Method Investments

An accounting technique used to assess the profits earned through an investment in another company, incorporating these profits into the investing company's income statements.