A. Woody Wood Sdn Bhd manufactures tables and chairs for schools in Malaysia since 2016. Its factory is located in Taman Industri Sedeng in Segamat. On 1 January 2019. the company acquired a computerised machine at a cost of RM550,000 to manufacture the tables and chairs. The cost can be broken into RM500,000 for the machine and RM50,000 for the computer software. The computer software is not an integral part of the machine. The estimated useful life of the machine and the computer software is 5 years. The company adopts revaluation model for both property plant and equipment and intangible assets. The fair value of the computer software on 31 December 2020 was RM34,000. Required: i. List the choice of subsequent measurement models for an intangible asset according to MFRS 138 Intangible Assets. (2 marks) ii. Explain the accounting treatment for the computer software for the year ended 31 December 2020 . (4 marks) Compute the surplus or deficit on revaluation for the year ended 31 December 2021 if the fair value of the computer software on that date was RM20,000. ( 4 marks) B. On 1 January 2021, Handkerchief Bhd started the development of its own brand for its new product. The company spent RM100,000 to hire a consultant for that purpose. The development of the brand completed on 30 June 2021 and the new product was launched on 1 July 2021. The board of directors decided to treat the brand as an intangible asset and amortised for five years. Required: Explain the accounting treatment for the brand for the year ended 31 December 2021. (2 marks) C. New Bricks Bhd is a manufacturer and distributor of bricks. The company is situated in Melaka. The company has been actively conducting research and development (R\&D) activities for introducing a new product for the Malaysian market. The company completed an R\&D activity and introduced a product namely New-brick 1010 recently. The R8D activities started on 1 January 2020 and were completed on 30 September 2020. The management was confident that the development activities would be a success starting 1 May 2020. The commercial production would be commenced on 1 October 2020. The company incurred RM500,000 for R8D cost where 30% of the cost was attributable to research activities. Included in the development cost was RM50,000 for brick expert salaries and RM30,000 for staff training. It was expected that the benefits derived from the development project should last for eight years. 2 During the year ended 31 December 2021, the management of the company decided to revalue all of its intangible assets. The fair value of the development cost on 31 December 2021 amounted to RM300,000. The company adopted the revaluation model for its intangible assets and the amortization is based on the yearly basis. Required: i. Discuss the accounting treatment of the Research and Development for the year ended 31 December 2020 and 31 December 2021. (8 marks) ii. Show the joumal entries for the year ended 31 December 2020 and 31 December 2021. (5 marks) A. Woody Wood Sdn Bhd manufactures tables and chairs for schools in Malaysia since 2016. Its factory is located in Taman Industri Sedeng in Segamat. On 1 January 2019. the company acquired a computerised machine at a cost of RM550,000 to manufacture the tables and chairs. The cost can be broken into RM500,000 for the machine and RM50,000 for the computer software. The computer software is not an integral part of the machine. The estimated useful life of the machine and the computer software is 5 years. The company adopts revaluation model for both property plant and equipment and intangible assets. The fair value of the computer software on 31 December 2020 was RM34,000. Required: i. List the choice of subsequent measurement models for an intangible asset according to MFRS 138 Intangible Assets. (2 marks) ii. Explain the accounting treatment for the computer software for the year ended 31 December 2020 . (4 marks) Compute the surplus or deficit on revaluation for the year ended 31 December 2021 if the fair value of the computer software on that date was RM20,000. ( 4 marks) B. On 1 January 2021, Handkerchief Bhd started the development of its own brand for its new product. The company spent RM100,000 to hire a consultant for that purpose. The development of the brand completed on 30 June 2021 and the new product was launched on 1 July 2021. The board of directors decided to treat the brand as an intangible asset and amortised for five years. Required: Explain the accounting treatment for the brand for the year ended 31 December 2021. (2 marks) C. New Bricks Bhd is a manufacturer and distributor of bricks. The company is situated in Melaka. The company has been actively conducting research and development (R\&D) activities for introducing a new product for the Malaysian market. The company completed an R\&D activity and introduced a product namely New-brick 1010 recently. The R8D activities started on 1 January 2020 and were completed on 30 September 2020. The management was confident that the development activities would be a success starting 1 May 2020. The commercial production would be commenced on 1 October 2020. The company incurred RM500,000 for R8D cost where 30% of the cost was attributable to research activities. Included in the development cost was RM50,000 for brick expert salaries and RM30,000 for staff training. It was expected that the benefits derived from the development project should last for eight years. 2 During the year ended 31 December 2021, the management of the company decided to revalue all of its intangible assets. The fair value of the development cost on 31 December 2021 amounted to RM300,000. The company adopted the revaluation model for its intangible assets and the amortization is based on the yearly basis. Required: i. Discuss the accounting treatment of the Research and Development for the year ended 31 December 2020 and 31 December 2021. (8 marks) ii. Show the joumal entries for the year ended 31 December 2020 and 31 December 2021