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QUESTION 3: [25 Marks] A. Similar to any other technology-based companies, the operations of Northern Bhd involve a lot of testing activities. Examples of the
QUESTION 3: [25 Marks] A. Similar to any other technology-based companies, the operations of Northern Bhd involve a lot of testing activities. Examples of the activities include the following: a) Measurement of the pollution level in segmented rivers in Malaysia via field study b) Formulation of several solution protocols to automatically detect water pollution. c) Evaluation of formulation improvement and exploration of new UF fiber. development dedicated to diverse applications d) Development of a prototype to be used during on-site studies for determination of process performance prior to full-scale investment. As a scientist, Miss Hadila perceived all these as R&D activities. However she was informed that the accounting standards view R&D activities differently. Briefly explain to her the difference between 'research and development' from the perspective MFRS 138. [5 Marks] B. The operation manager of Malawi Bhd is seeking your advice on his company's request for a computer software to be used in managing sales of the company. He is unsure of how to obtain the computer software, but realizes that different types of acquisition will impact the company's financial statements differently. He is considering the following possibilities: a) Making a purchase of the computer software externally. The quotation that he has received includes packages for payroll and general ledger. b) Making a purchase of a computer software that can be incorporated into a sales system that the company will develop. c) Signing a contract with independent programmers to develop a computer software that will specifically cater for Malawi Bhd's own use. d) Employing own programmers to write a computer software that the company will use
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