Beta Limited Statement of financial position as at 31 December 2021 2021 2020 2019 2018 R R R R Non-current assets Intangible asset 952 000 1 088 000 1 224 000 1 360 000 Non-current liabilities Deferred taxation: income tax 420 000 440 000 340 000 360 000 Current liabilities Current tax payable: income tax 300 000 240 000 320 000 280 000 QUESTION THREE [18] You are a vacation student currently on audit at Beta Limited (Beta). You are currently working on the intangible asset section of the audit. Beta is a manufacturer of paints and has only one intangible asset, being the cost of the development of a new material to be used in the manufacture of the paints. All the criteria for the capitalization of the development costs have been met. The development of the material was completed by 31 December 2018 and the amortization began on 1 January 2019. The development asset is amortised over a period of 10 years to a nil residual value using the straight line method. During the audit of the companys financial year ended 31 December 2021, you discovered an error. A payment of R200 000, which was made on 1 July 2018 for development costs incurred, had been erroneously debited to the current tax payable: income taxation account. This payment should have been capitalized to the development asset account as the criteria for capitalization has been met. Amortisation of the development costs has already been processed for the year ended 31 December 2021 (i.e. before the above mentioned error was discovered). On 31 December 2021, the recoverable amount was calculated to be R1000 000. No calculation of the recoverable amount had previously been necessary. No impairment journal has yet been processed. The Receiver of revenue allows the deduction of the development costs as they are incurred and have indicated that they will re-open the relevant tax assessments. The normal tax rate is 28%. All amounts are considered to be material. You have been provided with the following extract of the Statement of the financial position before the error was discovered. Page 6 of 6 Required Prepare the correcting journal entries relating to the error made for development costs (all adjustments must be processed in financial year 2021 since it is not possible for Beta Limited to process entries in the prior year general journals). Taxation journal entries are required. Show and reference all workings.