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Solar Ltd is started a company to undertake research and development of a new type of solar cars. For this research and development (R&D) it

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Solar Ltd is started a company to undertake research and development of a new type of solar cars. For this research and development (R&D) it has incurred the following expenditure in June 2016: Transaction Amount Payment status $750,000 Paid a) Obtaining a general understanding of solar energy-flow dynamics b) Understanding what local customers expect from an solar car c) Testing and refining a certain type of solar car d) Developing and testing a full prototype of the solar car, to be called the 'sFire Marketing of the solar car $450,000 Incurred $1,350,000 Incurred $2,850,000 Incurred $1,800,000 Paid It is expected that there is a large market for the solar cars, which will generate millions of dollars in revenue. On 1 July 2018 Solar Ltd acquired Electric Cars Ltd for cash of $35,000,000. At that date, Electric Car's net identifiable assets had a fair value of $29,000,000. The fair value of the net identifiable assets of Electric Cars are determined as follows: Customer list $250,000 Machinery $7,250,000 Buildings $7,500,000 Land $15,000,000 $30,000,000 Less: Bank loan $1,000,000 Net assets $29,000,000 At the end of the reporting period of 30 June 2019, Solar Ltd determines that the recoverable amount of the casti-generating unit, which is considered to be Electric Cars Ltd, totals $31,000,000. The carrying amount of the net identifiable assets of Electric Cars Ltd, which excludes goodwill, has not changed since acquisition and is $29,000,000. 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 2019. Show all workings. marks) 3. Prepare journal entries to record impairment of goodwill as at 30 June 2019. (1 mark) (2

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