Mr M. Ntini is a legend in South African cricket. He does not take part competitively...
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Mr M. Ntini is a legend in South African cricket. He does not take part competitively any more, and has been focusing on his business instead. Mr Ntini is the managing director and sole shareholder of RightFit Ltd, a company that imports and markets cricket shoes. A new, revolutionary cricket shoe is going to enter the market shortly, and Mr Ntini traveled to China to negotiate the sole distribution rights in Southern Africa. RightFit Ltd incurred R100 000 on business proposals, traveling costs, budgets and financial advice. RightFit Ltd was successfully awarded the sole distribution rights by the Chinese company, documented in an agreement between the companies, on 1 November 2021. RightFit Ltd will have these distribution rights for five years. Mr Ntini was really excited, as this shoe is in great demand already, and his company has the sole distribution rights which will generate large profits for his company. REQUIRED Using the 5 step theory approach and the Conceptual Framework, discuss if RightFit Ltd should capitalize or expense the R100 000 in the financial statements on 31 December 2021. Mr M. Ntini is a legend in South African cricket. He does not take part competitively any more, and has been focusing on his business instead. Mr Ntini is the managing director and sole shareholder of RightFit Ltd, a company that imports and markets cricket shoes. A new, revolutionary cricket shoe is going to enter the market shortly, and Mr Ntini traveled to China to negotiate the sole distribution rights in Southern Africa. RightFit Ltd incurred R100 000 on business proposals, traveling costs, budgets and financial advice. RightFit Ltd was successfully awarded the sole distribution rights by the Chinese company, documented in an agreement between the companies, on 1 November 2021. RightFit Ltd will have these distribution rights for five years. Mr Ntini was really excited, as this shoe is in great demand already, and his company has the sole distribution rights which will generate large profits for his company. REQUIRED Using the 5 step theory approach and the Conceptual Framework, discuss if RightFit Ltd should capitalize or expense the R100 000 in the financial statements on 31 December 2021.
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Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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