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Question - During the year ended 30 June, 2018 Crackpot Ltd incurred the following expenditure in respect of a research and development project:
Research $150 000
Development $330 000
The project is expected to return profits of $280 000 over the next four years that is $70 000 per year starting from 1 July, 2018.
Crackpot uses a discount rate of 10%.
Required - How much research and development should be expensed in the year ended 30 June, 2018? How to account for that?
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