Makhete Limited (Makhete) is in the computer application software development business. They are constantly on the outlook for new developments that can be sold to smartphone users.

Sipho Malake has spent the past three years in developing a bank application (Bapp) that will dramatically change the way internet banking is done. He decided to present his prototype of Bapp as for sale to Makhetes Managing Director, Bob Searle, who immediately realised that this app will sell in millions, once completely developed.

Sipho incurred expenses of R745 340 in developing Bapp up to 31 March 2012. Research constituted R145 340 of this amount, and the balance was development cost. Bob offered Sipho an appointment in the post as Chief Bapp developer at a monthly salary of R50 000 starting 1 April 2012. He also agreed to purchase the Bapp for R900 000 from Sipho. Sipho spent one month training staff of Makhete on how to further develop Bapp and development started on 1 May 2012.

A summary of the payments made to purchase and develop Bapp is as follows for the year ended 31 March 2013:

Date	Paid To:	Description of expenditure	Amount (R)
1 Apr 2012	Sipho Malake	Purchase of Bapp	900 000
1 Apr 2012 - 31 Mar 2013	Sipho Malake	Salary	600 000
1 Apr 2012 - 31 Mar 2013	Bapp development staff	Salaries (spread evenly over 12 months @ R200 000 per month)	2 400 000
1 Aug 2012	Graham Gordan	Installation advisor	200 000
31 Aug 2012	Cuco Caterers	Launch party of Bapp	80 000
31 Aug 2012	Adco advertising agency	Announcement in media countrywide of release of Bapp	150 000
1 Sept 2012	Internet Kings	Development of website on which Bapp can be purchased	1 500 000

Additional information:

1. Makhete uses the revaluation model to account for intellectual properties such as applications, and the cost model for websites. Revaluations are done annually at the end of the financial year. As there is an active market in the buying and selling of applications for smartphones, the fair value of the Bapp at 31 March 2013 was determined as R2 000 000.
2. The Bapp was completed 31 August 2012 and sales started on 1 September 2012.
3. Sipho and the development staff were actively involved in the support and maintenance of Bapp for the period 1 September 2012 to 31 March 2013.
4. The estimated life of the Bapp application as well as the website is three years each.
5. The payment to Graham Gordan was necessary to finally commission the Bapp application.

REQUIRED:

Journalise all of the above transactions in the books of Makhete Limited for the year ended 31 March 2013. (15)