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Question 3 Kapas Bhd. acquired a patent for RM5 million on 1 October 2019. The patent has a useful life of 25 years. Kapas account

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Question 3 Kapas Bhd. acquired a patent for RM5 million on 1 October 2019. The patent has a useful life of 25 years. Kapas account for its intangible asset using revaluation model. Fair value of the patent as at 30 September 2020 was RM5,280,000. Required: (a) Prepare journal entries for the patent for financial year ended 30 September 2020 and 2021, assuming the patent has finite useful life. (14 marks) (b) Discuss the accounting treatment for the patent in 2020, assuming the patent had indefinite life. (6 marks)

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