Question
On 30 June 2016, Santonada Bhd purchased a patent for RM1,200,000. The expected useful life of the patent is 10-year with no residual value. Santonada
On 30 June 2016, Santonada Bhd purchased a patent for RM1,200,000. The expected useful life of the patent is 10-year with no residual value. Santonada Bhd uses the straight line amortization method for all intangible assets. On 31 December 2017, Santonada Bhd chooses to revalue the patent. There is an active market for this particular patent and its fair value on 31 December 2017 is RM1,180,000.
Required:
Explain briefly the accounting treatment for the year ended 31 December 2017 in each of the above situations. Justify your answer with appropriate journal entries.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started