Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help answering this question if any could help me. thanks Question 2 Sydney Drome Lid is started a company to undertake research and

i need help answering this question if any could help me. thanks

image text in transcribed
Question 2 Sydney Drome Lid is started a company to undertake research and development of a new type of drome. For this research and development (R & D) it has incurred the following expenditure in June 2020: Transaction Amount Payment status a) Obtaining a general understanding of wind-flow dynamics $25,000 Paid b) Understanding what local customers expect from a drome $15,000 Incurred c) Testing and refining a certain type of drome $45,000 Incurred d) Developing and testing a full prototype of the drome, to be Incurred called the 'invisible drome'. $95,000 e) Marketing of the drome $60,000 Paid It is expected that there is a large market for the dromes, which will generate millions of dollars in revenue. On 1 July 2020 Sydney Drome Lid acquired Solar Dromes Lid for cash of $10,000,000. At that date, Solar Drome's net identifiable assets had a fair value of $8,700,000. The fair value of the net identifiable assets of Solar Dromes are determined as follows: Customer list $75,000 Machinery $2,175,000 Buildings $2,250,000 Land $4,500,000 $9,000,000 Less: Bank loan $300,000 Net assets $8,700,000 At the end of the reporting period of 30 June 2020, Solar Drome Lid determines that the recoverable amount of the cash-generating unit, which is considered to be Solar Dromes Ltd, totals $9,000,000. The carrying amount of the net identifiable assets of Solar Dromes Lid, which excludes goodwill, has not changed since acquisition and is $8,700,000. REQUIRED: 1. Prepare journal entries for each transaction from a to e above. (5 marks) 2. Calculate the amount for impairment of goodwill as at 30 June 2020. Show all workings. (2 marks) 3. Prepare journal entries to record impairment of goodwill as at 30 June 2020. (1 mark)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Information for Decisions

Authors: John J. Wild

9th edition

1259917045, 978-1259917042

More Books

Students also viewed these Accounting questions

Question

Explain how to control impulses.

Answered: 1 week ago