Question 4 Intangible Assets

A food manufacturing company, Goodies Ltd, develops, manufactures and sells health food bars. Goodies is now considering entering the home health equipment market and wishes to develop a new brand name to go with their new venture.

In August 2021, Goodies spends $20,000 conducting market research into the demand for health equipment and determine that this would be a viable market. In October, Goodies spends $30,000 on marketing consultants to develop a new brand name - G-health, which they believe will be a success in the market. In November 2021, Goodies spends a further $25,000 for a graphic designer to develop the logo for their new G-Health brand. In December 2021, Goodies launches their new G-health home health equipment and spends $40,000 on an advertising campaign to promote it.

Required:

A.) Provide the appropriate journal entries for Goodies Ltd to account for the above costs.

B.) Provide an explanation of why these are the appropriate entries, referring to AASB 138 where appropriate (max. 150 words).