During the year ended $30$ June $2023,$ Resources Ltd explored four different areas of interest

and spent $$200000$ in each. The results of E&E activities suggested that Areas A$,$ B and C

may contain mineral reserves so the company acquired leases over these three areas. The leases

cost $$300000,$ $$440000$ and $$360000$ respectively.

During the year ended $30$ June $2024,$ Resources Ltd commenced a drilling program to evaluate

Areas A$,$ B and C$.$ Eight exploratory wells were drilled, five in Area A$,$ two in Area B and one

in Area C at a cost of $$240000$ each. The five wells drilled in Area A did not result in any

mineral resource findings $($i$.$e$.$ they were dry holes$).$ The two wells drilled in Area B indicated

that the company had discovered economically recoverable reserves. Management was

uncertain about the likelihood of finding economically recoverable reserves for the well in Area

C as some mineral reserves were found but not enough to be considered economically

recoverable at this stage. Therefore, Resources Ltd decided to continue E&E activities in Area

C as of $30$ June $2024.$ Area A was abandoned, and, after incurring costs of $$100000$ to confirm

the technical feasibility and commercial viability of extracting the mineral resources,

development of Area B commenced.

During the year ended $30$ June $2025,$ to evaluate the area of interest further, three more wells

were drilled in Area B$.$ Of these, two were dry. Each well cost $$280000.$ The successful wells

in Area B were developed for a total cost of $$600000.$ Expenditure on additional plant and

equipment related to development was $$650000.$ After further dry wells costing $$350000$

were drilled in Area C$,$ management concluded that Area C did not contain any commercially

viable quantities of mineral resources, so it was abandoned.

These costs are summarised as follows.

Costs incurred for each area of interest

A B C D Total

$30/06/2023$ Exploration $200000200000200000200000800000$

Leases $3000004400003600001100000$

$30/06/2024$ Dry wells $12000001200000$

Other wells $480000240000720000$

Technical

feasibility$/$

commercial

viability costs $100000100000$

$30/06/2025$ Dry wells $560000350000910000$

Other wells $280000280000$

Development $600000600000$

PPE $650000650000$

Total $1700000331000011500002000006360000$

$9$

Required

Determine what amounts would be recognised as an expense $($in the profit or loss$)$ versus

capitalised as an asset, in relation to each area of interest for each financial year assuming

Resources Ltd expenses all of its E&E costs as incurred