Calculate total research and development to be capitalised

Assignment Help Managerial Accounting
Reference no: EM133157004

Question - Sunshine Ltd (Sunshine) is uses EVA to determine if shareholder value is created. The Income Statement for (Sunshine) is provided below:

Income Statement for the year-ended 30 June 2022 for Sunshine Ltd


2021

2022


($ Millions)

($ Millions)

Net profit after income tax (NPAT)

160

416

Includes the following expenses:



Interest expense

80

80

Depreciation

50

40

Research and development (R&D)

140

140

The following additional information is provided:

No R&D expense was incurred in 2019 and 2020.

The benefits from R&D are generally consumed over 4 years.

Corporate tax rate is 20%.

Required -

a. Calculate the financing effect of interest to be eliminated from NPAT for 2022.

b. Calculate the total research and development amortisation expense for 2022.

c. Calculate the total research and development to be capitalised for 2022.

Reference no: EM133157004

Questions Cloud

Advantage or disadvantage of using the new machine : Madison Optometry is considering the purchase of a new lens grinder to replace a machine that was purchased several years ago. Selected information on the two m
Failure of the acquisition : Briefly describe the merger/acquisition you have selected? Was the merger/acquisition successful?
Calculate the options for the instalment payments : Calculate the options for the instalment payments in 2021 and indicate when they are due. Be precise with the dates and the amount due on each date
Describe the interviewee background and perspective : Testimonial - interview someone (anonymously or not) who identifies themselves within the underrepresented group Visible Disability or analyze the interview of
Calculate total research and development to be capitalised : The benefits from R&D are generally consumed over 4 years. Calculate the total research and development to be capitalised for 2022
Challenges involved in managing restaurant operation : Determine the challenges involved in managing a restaurant operation that are specific to your state or local municipality, as well as how you would address tho
Decrease in the overall quality of medical services : It has been suggested by some that universal health care will result in a decrease in the overall quality of medical services.
Supplier code of conduct is committed to ethical business : Explain how each aspect of your Supplier Code of Conduct is committed to ethical business practices and social responsibility.
At what constant rate is the stock expected to grow : Carnes Cosmetics Co.'s stock price is $46, and it recently paid a $1.00 dividend. At what constant rate is the stock expected to grow

Reviews

Write a Review

Managerial Accounting Questions & Answers

  How do see the integration of roles in job as a manager

Manager as a set of roles: Interpersonal, Informational and Decisional. How do you see the integration of these roles in your job as a manager?

  What estimated raw material inventory balance at of end july

If 106,000 pounds of raw materials are needed to meet production in August, what is the estimated raw materials inventory balance at the end of July?

  Determine the fit of a new or revised service process

What are the three general factors that determine the fit of a new or revised service process? Product design, process design, and personnel skills

  Why the behavior of the production manager is unacceptable

Explain why the behavior of the production manager is unacceptable for a continuous improvement environment. How an activity-based responsibility accounting approach would discourage the kind of behavior described.

  Should these other factors be included in maras analysis

With the additional information included, the analysis produced a positive result for the investment. should these other factors be included in Mara's analysis

  Calculate the materials price variance and materials usage

Budgeted fixed overhead is $51,000. Calculate the materials price variance and materials usage variance for August

  What the average collection period of the receivables

Net credit sales during the year amounted to $8061000. What the average collection period of the receivables in terms of days

  Prepare the opportunity loss table

A newspaper boy buys magazines for Rs.13 each and sells them for Rs.18 each. Prepare the opportunity loss table

  Prepare a production budget for the January

They always plan to have end inventory equal to 20% of next month's sales. Prepare a production budget for the January, February and March

  Prepare a cost reconciliation report

Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process for the Etching Department in July.

  What will the new break-even point in skatboard

If this change takes place and the selling price per skateboard remains constant at $37.50, what will be new CM ratio and the new break-even point in skatboard

  Find which statement about sustainability reporting is false

Find Which statement about sustainability reporting is false? It focuses on the economic, environmental and social impacts of an organisation's activities.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd