Question: Question TWO (25 marks) . SHORT ANSWER QUESTIONS WATERVILLE Company bought a Copyright for $20,000,000 on 1 January 2018 for cab The expected total

Question TWO (25 marks) . SHORT ANSWER QUESTIONS WATERVILLE Company bought a Copyright for $20,000,000 on 1 January 2018 for cab The expected total useful life of the Copyright is 10 years. Assume that the Residual Value of the Copyright is always $0 (ie., Zero). On January 2019 WATERVILLE Company barries out an Impairment Test on the Copyright The Value in Use of the Copyright is $10,000,000 the Fair Value is 56,000.000 and the costs to sell are $500,000. Assume that the expected total useful life of the Copyright remains unchanged. On 1 January 2020, the Recoverable Amount of the Copyright is $16,000,000 The firm uses Straight Line Amortization. Assume that the Accounting year-end is 31 December. Assume that the expected total useful life of the Copyright is always 10 years and remains unchanged. Required: a. Show the Journal Entries required by WATERVILLE Company on: i. 1 January 2018) ii. iii. iv. V. vi. 31 December 2018 1 January 2019 31 December 2019 1 January 2020. 31 December 2020 Clearly show all workings. b. Show the Financial Statement Extracts for the year-ended 31 December 2020.

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