SAMPLE+Solutions_upload+%284%29+%281%29.pptx

SAMPLE+Solutions_upload+%284%29+%281%29.pptx - Exam Paper...

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Exam Paper SAMPLE The examination paper adds to 60 marks your internal assessment marks and comprises 60% of the total marks allocated in this course. To obtain a pass in this course , you must achieve at least 50% overall in course assessment This is a CLOSED BOOK Exam. Non text storing calculators are allowed. Bi-lingual dictionaries are not allowed. All mobile phones must be switched off and placed under your desk. You are in breach of exam conditions if it is on your person Show all calculations/workings in deriving your answers TO BE NOTED :
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Soweto Records Ltd commenced business in 2014, recording and distributing music. Soweto Records Ltd owns copyrights over music recordings. These music copyrights relate to: i. music recordings by musicians contracted to Soweto Records Ltd, which were recorded in studios owned by Soweto Records Ltd, and financed by Soweto Records Ltd; and ii. music recordings purchased by Soweto Records Ltd, when Soweto Records Ltd purchased the entire net assets of Galleo Records Ltd. Soweto Records Ltd’s financial year ends on 30 September. REQUIRED: Describe how Soweto Records Ltd in accordance with AASB138: Intangible Assets should account for the music copyrights: 1. in the financial year ending 30 September 2014; and 2. in subsequent financial years. Question 1 PART A
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1. in the financial year ending 30 September 2014; i) Internally Developed Copyrights AASB138.21 specifies that internally developed copyrights can only be recognised if: it is probable that the expected future economic benefits that are attributable to the copyright will flow to the entity; the cost of the copyright can be measured reliably, only if we can reliably measure the cost of using/depreciating the recording studio, labour and material costs. Question 1 PART A ii) Copyrights purchased as part of acquiring another business AASB138 requires all purchased copyrights to be recognised, including those copyrights acquired, as part of acquiring another business. Since copyrights are purchased as part of a business combination, its cost is measured at fair value of the copyright, at the date of the business acquisition .
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2. subsequent financial years i) Internally Developed Copyrights – ii) Copyrights purchased as part of acquiring another business Assess the useful life of each copyright as finite or indefinite If finite useful lives amortized If indefinite useful lives subject to impairment test Subsequent measure of each copyright carried at Cost Or revaluation model (at fair value) there is no active market
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On 1 July 2013 Pomodoro Ltd acquired cooking equipment at a cost of $ 500 000. The useful life is estimated in 10 years and residual value is zero. The equipment is amortized on a straight-line basis.
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