Acounting mfrs

i, ii, iii, QUESTION ONE a) Dana Kencana Bhd acquires new technology that will revolutionise its current manufacttuing process. Costs incurred are as follows; RM Original cost of new technology 1,200,000 Discount received 120,000 Staff training incurred in operating the new process 60,000 Testing of the new manufacturing process 12,000 Losses incurred while other pans of the plant stood idle 24,000 Dana Kencana Bhd was also developing a new production process, During 2019, expenditure incurred was RM100,000, of which RM90_000 was incurred before 1 December 2019 and RM10,000 between 1 December 2019 and 31 December 2019. The company can demonstrate that, at 1 December 2019, the production process met the criteria for recognition as an intangible asset. The recoverable amount of the know-how embodied in the process is estimated to be RM50,000_ Required: What are the acquired costs that could be recognized and capitalized as intangible assets? (10 marks] How should the expenditure on the production process be recognized? (8 marks] Assume there was zero intangible assets previously, How should these items be presented in the nancial statements? (7 marks] II) On 1 January 2019, MM Research Sdn Bhd has successilly bid for a government grant to develop an augmented reality system for the Ministry of Tourism, The system will be used in various museum and tourist spots to attract tourism, The government agrees to reimburse MM 50 per cent of specied project costs up to RM200,000 over a twoyear period, 1n accordance with the agreement, MM must meet specied targets with regards to testing the system, The entity must also prepare six-monthly progress reports for the government, If targets are met and progress is considered successi], the government is likely to provide Original cost of new technology 1,200,000 Discount received 120,000 StatT training incurred in operating the new process 60,000 Testing of the new manufacturing process 12,000 Losses incurred while other parts of the plant stood idle 24,000 Dana Kencana Bhd was also developing a new production process. During 2019, expenditure incurred was RM100,000, of which RM90,000 was incurred before 1 December 2019 and RM10,000 between 1 December 2019 and 31 December 2019. The company can demonstrate that, at 1 December 2019, the production process met the criteria for recognition as an intangible asset. The recoverable amount of the know-how embodied in the process is estimated to be RM50,000. Required: i. What are the acquired costs that could be recognized and capitalized as intangible assets? (10 marks] ii. How should the expenditure on the production process be recognized? (8 marks] iii. Assume there was zero intangible assets previously. How should these items be presented in the nancial statements? (7 marks] h) On 1 January 2019, MM Research Sdn Bhd has successfully bid for a government grant to develop an augmented reality system for the Ministry of Tourism. The system will be used in various museums and tourist spots to at1ract tourism. The government agrees to reimburse MM 50 per cent of specied project costs up to RM200,000 over a twoyear period. In accordance with the agreement, MM must meet specied targets with regards to testing the system. The entity must also prepare six-monthly progress reports for the government. If targets are met and progress is considered successful, the government is likely to provide further support in the future. Continued. .. 1,13 i. ii. iii. II) On 1 January 2019, MM Research Sdn Bhd has successfully bid for a government grant to develop an augmented reality system for the Ministry of Tourism. The system will be used in various museums and tourist spots to attract tourism. The government agrees to reimburse MM 50 per cent of specied project costs up to RMZOOJJDO over a twoyear period. In accordance with the agreement, MM must meet specied targets with regards to testing the system. The entity must also prepare six-monthly progress reports for the government. If targets are met and progress is considered successful, the government is likely to provide further support in the future. Continued. .. The following are the milestones and cost incurred by MM. Milestone Dale completed Cost incurred Review of sites and drawings 30 June 2019 RM25,000 System Design 31 Dec 2019 RMSOD Soware development 1 June 2020 RM150,000 Soware testing Not yet completed RM40 000 Of the soware development costs incurred up to 1 June 2020, RM30,00[) did not qualify for reimbursement. Required: Discuss the accounting treatment of the govemment grant. [6 marks] Prepare the journal entries to record the expenditure and reimbursement. (12 marks] Present the extracts of the nancial statements for the year 2019. (9 marks]