Smart Robots Ltd started a company to undertake research and development of a new type of Robots. For this research and development (R & D) it has incurred the following expenditure in June 2020:

Transaction	Amount	Payment Status
a) Obtaining a general understanding of Robot dynamics	$25,000	Paid
b) Understanding what local customers expect from a Robot in manufacturing sector	$150,000	Incurred
c) Testing and refining a certain type of Robot	$450,000	Incurred
d) Developing and testing a full prototype of the Robot, to be called the 'Rob King'	$950,000	Incurred
e) Marketing of the Robot	$600,000	Paid

It is expected that there is a large market for the Robots, which will generate millions of dollars in revenue.

On 1 July 2019 Sydney Smart Robots acquired Al Robots Ltd for cash of $13,000,000. At that date, Al Robot's net identifiable assets had a fair value of $17,400,000. The fair value of the net identifiable assets of Al Robots Ltd are determined as follows:

Customer List $150,000 Machinery $ 4,350,000 Buildings $ 4,500,000 Land $ 9,000,000 = 18,000,000

Less: Bank Loan $ 600, 000 Net assets $17,400,000

At the end of the reporting period at 30 June 2020, Smart Robots determines that the recoverable amount of the cash-generating unit, which is considered to be Al Robot Ltd, totals $13,000,000. The carrying amount of the net identifiable assets of Al Robot Ltd, which excludes goodwill, has not changed since acquisition and is $17,400,000.

Required:

1. Prepare journal entries for each transaction from a to e above. (5 marks)

2. Calculate the amount for impairment of goodwill as at 30 June 2020. Show all workings. (2 marks)