Question 7 10 Marks PARTA AASB 138 - Intangible Assets require that the expenditure on research activities must be expensed. Required: Outline the implications of this requirement on firm's profit. 3 Marks PART B On 1 July 2020, Canberra Ltd enters into a joint operation with New South Wales Ltd to form an unincorporated entity to produce a new type of building product. All the current and future contributions are to be based on a 50:50 split, as are the future distributions of outputs. Canberra Lad's initial contribution consists of $4,000,000 cash and New South Wales Ltd contributes machinery that is recorded at $3,800,000. The fair value of machinery is $4,000,000. During the first year of operation both parties contributed a further $6,000,000 cash. Required: Provide the journal entries in the book of Canberra Ltd and in the book of New South Wales Ltd to account for the joint operators' contributions to the joint operation. 7 Marks Ignore tax effect. 13+7 - 10 Marks