The following is an extract of the Statement of Financial Position of Mice Lab Berhad as...

 

Transcribed Image Text:

The following is an extract of the Statement of Financial Position of Mice Lab Berhad as at 31 December 2019. Intangible Assets Patent Research and Development Copyright License Note (0) (1) (1) (1) Cost 120,000 96,000 90,000 Notes: 1. The patent is related to the anti-virus formula. It was acquired on 1 January 2019. The patent is subsequently measured using cost model and amortized on a straight-line basis over 6 years. On 31 Mac 2020, the management decided to sell the patent to Monkey Lab for RM150,500. 2. On 18 December 2019, Mice Lab was doing research to find formula for corona virus. The company received an international grant of RM3,000,000. Since then, as at 31 May 2020, none of the formulae was useful, the company had spent RM1,580,000. In June, the technical teams developed a prototype named Gama Covid Vac. It was proven successful to the mice. However, after some clinical trials to few infected patients, the government raised issues on the security and health issues of the vaccine. The prototype cost RM1,000,000 as at 31 December 2020. The company does not have sufficient grant to proceed with the activity. 3. The copyright relates to a publication of a documentary on it one successful experiment. It was acquired on 1 January 2015 with a cost of RM96,000. The copyright is subsequently measured using the cost model and amortized on a straight-line basis over 10 years. However, on 1 January 2020, the copyright is determined to have remaining useful life of only 2 years. 4. The license is related to permission to extract mineral deposit at a government land as for research purpose. It was acquired on 1 March 2017. The license is subsequently measured using the revaluation model and amortized on a straight-line basis over 15 years. The revaluation is to be performed every 3 years. On 31 December 2020, the fair value of the license is identified to be RM35,000 only. Required: a) Prepare journal entries for the financial year ended 31 December 2020, including journal entries for amortization if applicable (Assumption: There is no other transaction involving intangible assets except those mentioned in the Notes above). (10 marks) b) Prepare an extract of the Statement of Financial Position of Mice Lab Berhad as at 31 December 2016 (Assumption: There is no other transaction involving intangible assets. except those mentioned in the Notes above). (3 marks) The following is an extract of the Statement of Financial Position of Mice Lab Berhad as at 31 December 2019. Intangible Assets Patent Research and Development Copyright License Note (0) (1) (1) (1) Cost 120,000 96,000 90,000 Notes: 1. The patent is related to the anti-virus formula. It was acquired on 1 January 2019. The patent is subsequently measured using cost model and amortized on a straight-line basis over 6 years. On 31 Mac 2020, the management decided to sell the patent to Monkey Lab for RM150,500. 2. On 18 December 2019, Mice Lab was doing research to find formula for corona virus. The company received an international grant of RM3,000,000. Since then, as at 31 May 2020, none of the formulae was useful, the company had spent RM1,580,000. In June, the technical teams developed a prototype named Gama Covid Vac. It was proven successful to the mice. However, after some clinical trials to few infected patients, the government raised issues on the security and health issues of the vaccine. The prototype cost RM1,000,000 as at 31 December 2020. The company does not have sufficient grant to proceed with the activity. 3. The copyright relates to a publication of a documentary on it one successful experiment. It was acquired on 1 January 2015 with a cost of RM96,000. The copyright is subsequently measured using the cost model and amortized on a straight-line basis over 10 years. However, on 1 January 2020, the copyright is determined to have remaining useful life of only 2 years. 4. The license is related to permission to extract mineral deposit at a government land as for research purpose. It was acquired on 1 March 2017. The license is subsequently measured using the revaluation model and amortized on a straight-line basis over 15 years. The revaluation is to be performed every 3 years. On 31 December 2020, the fair value of the license is identified to be RM35,000 only. Required: a) Prepare journal entries for the financial year ended 31 December 2020, including journal entries for amortization if applicable (Assumption: There is no other transaction involving intangible assets except those mentioned in the Notes above). (10 marks) b) Prepare an extract of the Statement of Financial Position of Mice Lab Berhad as at 31 December 2016 (Assumption: There is no other transaction involving intangible assets. except those mentioned in the Notes above). (3 marks)

Answer rating: 100% (QA)

a Prepare journa... View the full answer