Economics · Economy
Dempsey Co's year-end is 30 September 20X5. It commenced the development stage of a drug on 1 January 20X5, incurring expenditure of $40,000 per month until completed on 30 June 20X5, when immediate production began. The directors became confident of success on 1 March 20X5. The drug's commercial life is 5 years. Under IAS 38, what are the carrying amount of the intangible asset at 30 September 20X5 and the total expense charged to profit or loss for the year?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Carrying Amount: $98,667; Profit or Loss Charge: $240,000
- 2Carrying Amount: $228,000; Profit or Loss Charge: $88,000
- 3Carrying Amount: $152,000; Profit or Loss Charge: $88,000✓
- 4Carrying Amount: $152,000; Profit or Loss Charge: $141,333
Correct answer
Carrying Amount: $152,000; Profit or Loss Charge: $88,000
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