. it has been the policy of mineco to capitalize all exploration and evaluation costs on an area of interest basis. Mineco’s record reveals the following incurred cost during a period in relation to a specific area of interest. $ 1.hire of drilling equipment’s including goods and service tax $1000 11,000 2. Mineco’s ltd non-executive director’s fees paid during the period $320,000 3. Cash paid to acquire seismic study from government that is selling for the area, goods and service tax – exempted $6000 4. contractor’s fee for lab our to set up the fencing include goods and service tax 100 $1100 5. Salary of project manager hired specifically to manage the exploration and evaluation activities in the area $120,000 6.Contractor fees for exploratory drilling, including goods and service tax of $5000 $55,000 7. Stationary and other office supplies used by the project manager,including goods and service tax $60 $660 8. Cash paid to acquire exploration rights from the area from the government, goods and service tax exempted $20,000 9.Cash paid to acquire fencing materials to mark – out the area of interest including goods and service tax of $160 $1760 Required: Determine the amount of the exploration and evaluation asset to be capitalized by Mineco ltd in relation to area of interest kuks tribal land.
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