question 2

QUESTION 2 (25 MARKS: 45 MINUTES) A. I-Boat Bhd. has secured a tender to establish boat business in Bandaraya Kuala Terengganu. The boats' operation begins 1 July 2015, after the license to operate is granted by the licensing authority. In the first year of operation, I-Boat Bhd. has incurred the following expenditures in establishing the boat business: RM 150,000 10,000 7,000 DATE COSTS 1 January 2015 General start-up costs. 31 March 2015 Hospitality and Service training costs for the boat drivers. 30 June 2015 Legal costs directly attributable to the acquisition of the boat licenses. 30 June 2015 Payment to the licensing authority for the boat licenses. 1 July 2015 Purchase 10 sets of uniform for the boat drivers. 1 July 2015 Payment for a billboard advertisement for 12 months period. 100,000 1,500 20,000 At 31 December 2015, 1-Boat Bhd. made the following assessments: 1. The economic life of the boat licenses is five years beginning 1 July 2015. 2. The residual value of the boat licenses is zero. Required: a) Prepare journal entries to record the above costs incurred by I-Boat Bhd. for the year ended 31 December 2015 (Assume that all the payments are made by cash). (6 marks) b) Illustrate the intangible assets information in the Statement of Financial Position of I-Boat Bhd. as at 31 December 2015. (4 marks) c) An entity generally applies MFRS138 in accounting for Intangible Assets. Elaborate the definition of an intangible asset according to MFRS138. (2.5 marks)