1. ABC Plc paid XYZ Company $100,000 for the exclusive right to market a particular product, using the XYZ name and logo in promotional material. The franchise runs for as long as the XYZ is in business. (10 marks)

2. ABC Plc spent $300,000 developing a new manufacturing process (economic viability not achieved). (10 marks)

3. In January 2020, ABC Plc's incurred Legal and registration costs of$140,000. The patent runs for 20 years. The management estimates the useful life of the patent to ABC Plc for 10 years. Record the entry on January 1 and December 31, 2020. (15 marks)

4. At December 31, 2015, Hall reports the following statement of financial position information:

Current assets $ 800,000

Non-current assets (including goodwill recognized in purchase) 2,400,000

Current liabilities (700,000)

Non-current liabilities (500,000)

Net assets $2,000,000

It is determined that the recoverable amount value of the Hall division is $2,100,000.

Instructions

1. Determine the impairment loss, if any, to be recorded on December 31, 2015 (10 marks).

(b) Assume that the recoverable amount of the Hall division is $1,800,000 instead of $2,100,000. Prepare the journal entry to record the impairment loss, if any, on December 31, 2015(10 marks).

5. ABC Inc. is involved in a lawsuit at December 31, 2010. (a) prepare the December 31 entry assuming it is probable that ABC will liable for $1,000,000 as a result of this suit. (b) prepare the December 31 entry, if any, assuming it is not probable that ABC will be liable for any payment as a result of this suit. (10 marks)