Shaw Communications Inc. recently acquired a patent regarding a new TV streaming application. Additional equipment and a computer were purchased to begin making the application available to their customers. Details of the assets are provided below:

Asset

Date of Purchase

Cost

Estimated Residual Value

Estimated Useful Life (Years)

Patent

February 12, 2023

254,500

0

22

Equipment

February 12, 2023

365,750

63,000

17

Computer

February 12, 2023

82,325

2,500

5

The company's year-end is December 31st and it uses the straight-line method of depreciation for all capital assets, including intangibles, calculated to the nearest whole month. For example, any assets purchased before the 15th of each month are depreciated for the entire month.

REQUIRED:

1. Record the journal entries for amortization and depreciation at December 31, 2023 on all capital assets, including the patent.

(12 marks)

2. Assume that because a highly superior alternative TV streaming application became available from a competitor, Shaw Communications' application no longer has value and is officially discontinued on January 27, 2027. The equipment was sold for $295,XXX in cash and the patent and computer were scrapped for $0 value. Record the journal entries for the disposal of all assets. (18 marks)