DEF Lid which is a research centre for cosmetic and perfumes, its main clients are relevant...

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DEF Lid which is a research centre for cosmetic and perfumes, its main clients are relevant manufacturers. The company incurred expenditures on various research and development projects for the year ended 31 December 2021. Material Wages Directors' salary of research department Depreciation on plant & equipment (Note 1) Charges on cleaning, electricity and water Project 2000 S 416,000 320,000 Project 400E Project 600F $ 288,000 352,000 64,000 S 384,000 896,000 64,000 96,000 96,000 112,000 32,000 32,000 48.000 12.800 928.000 1.536.000 748.800 Note 1 The related plant and equipment is designed for specific research and development project. The above three projects have following information Project 200D This is the project aimed at searching for new types of herb to use in skincare process Project 400E This is the project studying new device to be added to the manufacturing process for perfume in order to reduce the wastage and pollution emission existing manufacturing process by 20% Progress in this process is satisfactory and the response by perfume manfacturers during recent demonstration was encouraging Some clients has confirmed they will order the devices. Moreover, management of DEF Lid consdiered that the company has sufficient technical and financial resources to produce and market this new device Project 600F This is the project for developing the new line of beauty product, information obtained from market research finds that the new perfume will be accepted by end user customers However, the budget production of this new line beauty product has not yet been approved by board of directors because the competition is so keen that the profit margin may not be able to cover the administrative and distribution expenses DEF Lid will group the research and development as other expenses in Statement of profit or loss Required Prepare the extract of Statement of profit or loss and Statement of Financial Position as at 31 December 2021 (8 marks) and discuss the accounting treatment of each of above projects (9 marks) DEF Lid which is a research centre for cosmetic and perfumes, its main clients are relevant manufacturers. The company incurred expenditures on various research and development projects for the year ended 31 December 2021. Material Wages Directors' salary of research department Depreciation on plant & equipment (Note 1) Charges on cleaning, electricity and water Project 2000 S 416,000 320,000 Project 400E Project 600F $ 288,000 352,000 64,000 S 384,000 896,000 64,000 96,000 96,000 112,000 32,000 32,000 48.000 12.800 928.000 1.536.000 748.800 Note 1 The related plant and equipment is designed for specific research and development project. The above three projects have following information Project 200D This is the project aimed at searching for new types of herb to use in skincare process Project 400E This is the project studying new device to be added to the manufacturing process for perfume in order to reduce the wastage and pollution emission existing manufacturing process by 20% Progress in this process is satisfactory and the response by perfume manfacturers during recent demonstration was encouraging Some clients has confirmed they will order the devices. Moreover, management of DEF Lid consdiered that the company has sufficient technical and financial resources to produce and market this new device Project 600F This is the project for developing the new line of beauty product, information obtained from market research finds that the new perfume will be accepted by end user customers However, the budget production of this new line beauty product has not yet been approved by board of directors because the competition is so keen that the profit margin may not be able to cover the administrative and distribution expenses DEF Lid will group the research and development as other expenses in Statement of profit or loss Required Prepare the extract of Statement of profit or loss and Statement of Financial Position as at 31 December 2021 (8 marks) and discuss the accounting treatment of each of above projects (9 marks)