Asset recognition State whether or not an asset should be recorded in the balance sheet of LMR Ltd as at 30 June 2022 in each of the following situations. Indicate the amount of the asset (if any) and any assumptions made.

1 On 15 May 2022, LMR Ltd paid $10 000 for an insurance premium. The premium covers losses incurred in the period up to 14 May 2023.

2 LMR Ltd paid $100 000 for a patent in April 2022.

3 LMR Ltd has just hired a new general manager who is an expert in the business carried on by LMR Ltd. With the help of this person, the company is expected to increase its annual profits by $850 000. The general manager’s salary is $450 000 per annum.

4 LMR Ltd purchased land in 1994 for $500 000. The market value of this land is $750 000 as at 30 June 2022.

5 On 29 June 2022, LMR Ltd paid $900 000 for a printing service business consisting of machines worth $500 000 and a list of 75 established clients.

6 Over the years, LMR Ltd has created goodwill among its clients so that it now enjoys good relations with over 2000 customers. It is estimated that if the business was sold, as at 30 June 2022, LMR Ltd could demand an additional $400 000 above the sale price of its physical assets.

7 A machine is purchased for $500 000 and costs an additional $200 000 to install.