Ignore VAT. Baninzi Limited is a company involved in various activities and investments. The following information is relevant for the year ended 30 April 2018. The company owns a patent registered on 1 August 2016 at a cost of R180 000. The patent has an estimated finite useful life of 15 years and there is no commitment from a third party to purchase it. The company is busy with a research and development project on a product named "Ichibi pool". The product will be connected to a swimming pool pump that tests the water every day for algae growth and will release the correct chemicals into the pool when necessary to keep it sparkling clean. During the current financial year from 1 May 2017 to 30 June 2017 an amount of R130 000 was spent in cash on research for the project. Development costs that are financed with a loan facility through Nceda Bank of R910 000 were incurred from 1 July 2017 to 28 February 2018. The costs were incurred evenly throughout these months. The project manager informed you that the six development phase criteria was met from 1 September 2017. Included in these costs are administrative costs of R30 000 that are not considered to be directly attributable to the research and development project. For the month of March 2018 training costs of 35 000 were incurred, paid in cash for the completion of the development phase of the product. A party was held on 31 March 2018 with a cost of R20 000 paid in cash to celebrate the commissioning of the Ichibi Pool project. The directors informed you that the project will have an indefinite life. On 30 April 2018 the recoverable amount of Ichibi Pool is estimated at R1 500 000. REQUIRED: 1. Prepare the journal entries to account for the above information in the accounting records of Baninzi Limited for the financial year ended 30 April 2018. (10 Marks) (Show all workings) 2. Prepare the Intangible Assets note for Baninzi Limited for the financial statements for the year ended 30 April 2018. Comparatives are not required. (6 Marks) 3. Explain in short the relevance of the recoverable amount given of the Ichibi Pool project in the financial statements of Baninzi Limited at 30 April 2018. (2 Marks) Presentation: Format and layout. (2 Marks) Ignore VAT. Baninzi Limited is a company involved in various activities and investments. The following information is relevant for the year ended 30 April 2018. The company owns a patent registered on 1 August 2016 at a cost of R180 000. The patent has an estimated finite useful life of 15 years and there is no commitment from a third party to purchase it. The company is busy with a research and development project on a product named "Ichibi pool". The product will be connected to a swimming pool pump that tests the water every day for algae growth and will release the correct chemicals into the pool when necessary to keep it sparkling clean. During the current financial year from 1 May 2017 to 30 June 2017 an amount of R130 000 was spent in cash on research for the project. Development costs that are financed with a loan facility through Nceda Bank of R910 000 were incurred from 1 July 2017 to 28 February 2018. The costs were incurred evenly throughout these months. The project manager informed you that the six development phase criteria was met from 1 September 2017. Included in these costs are administrative costs of R30 000 that are not considered to be directly attributable to the research and development project. For the month of March 2018 training costs of 35 000 were incurred, paid in cash for the completion of the development phase of the product. A party was held on 31 March 2018 with a cost of R20 000 paid in cash to celebrate the commissioning of the Ichibi Pool project. The directors informed you that the project will have an indefinite life. On 30 April 2018 the recoverable amount of Ichibi Pool is estimated at R1 500 000. REQUIRED: 1. Prepare the journal entries to account for the above information in the accounting records of Baninzi Limited for the financial year ended 30 April 2018. (10 Marks) (Show all workings) 2. Prepare the Intangible Assets note for Baninzi Limited for the financial statements for the year ended 30 April 2018. Comparatives are not required. (6 Marks) 3. Explain in short the relevance of the recoverable amount given of the Ichibi Pool project in the financial statements of Baninzi Limited at 30 April 2018. (2 Marks) Presentation: Format and layout. (2 Marks)