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O Licence from the government to operate in its business sector for five years from 1 January 2023 Planning costs - new website, which will be launched in 2024 Purchase of laptops for employees on 1 January with a useful life of 3 years Microsoft user licenses purchased on 1 January 2023 Training of new employees Consultancy fees (including VAT @15%) Legal costs (including VAT @15%) Useful life of the intangible assets R1 440 000 R72 000 R144 000 R144 000 R96 000 R186 300 R62 100 5 years On 1 January 2024, the company expected the revenue from the license to decrease as the government gazetted new laws resulting in the release of more licenses into the market. This was an indication of possible impairment. Management prepared the following cash flow forecasts: Year Rands Discount factor 2024 372 000 0.8734 2025 300 000 0.7628 2026 258 000 0.6662 2027 234 000 0.5818 The market-related discount rate of the company is 14.5% The current gross selling price of the license in the market is The estimated net cost to sell is R1 140 000 R84 000

O Licence from the government to operate in its business sector for five years from 1 January 2023 Planning costs - new website, which will be launched in 2024 Purchase of laptops for employees on 1 January with a useful life of 3 years Microsoft user licenses purchased on 1 January 2023 Training of new employees Consultancy fees (including VAT @15%) Legal costs (including VAT @15%) Useful life of the intangible assets R1 440 000 R72 000 R144 000 R144 000 R96 000 R186 300 R62 100 5 years On 1 January 2024, the company expected the revenue from the license to decrease as the government gazetted new laws resulting in the release of more licenses into the market. This was an indication of possible impairment. Management prepared the following cash flow forecasts: Year Rands Discount factor 2024 372 000 0.8734 2025 300 000 0.7628 2026 258 000 0.6662 2027 234 000 0.5818 The market-related discount rate of the company is 14.5% The current gross selling price of the license in the market is The estimated net cost to sell is R1 140 000 R84 000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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O Licence from the government to operate in its business sector for five years from 1 January 2023 Planning costs - new website, which will be launched in 2024 Purchase of laptops for employees on 1 January with a useful life of 3 years Microsoft user licenses purchased on 1 January 2023 Training of new employees Consultancy fees (including VAT @15%) Legal costs (including VAT @15%) Useful life of the intangible assets R1 440 000 R72 000 R144 000 R144 000 R96 000 R186 300 R62 100 5 years On 1 January 2024, the company expected the revenue from the license to decrease as the government gazetted new laws resulting in the release of more licenses into the market. This was an indication of possible impairment. Management prepared the following cash flow forecasts: Year Rands Discount factor 2024 372 000 0.8734 2025 300 000 0.7628 2026 258 000 0.6662 2027 234 000 0.5818 The market-related discount rate of the company is 14.5% The current gross selling price of the license in the market is The estimated net cost to sell is R1 140 000 R84 000
Transcribed Image Text:O Licence from the government to operate in its business sector for five years from 1 January 2023 Planning costs - new website, which will be launched in 2024 Purchase of laptops for employees on 1 January with a useful life of 3 years Microsoft user licenses purchased on 1 January 2023 Training of new employees Consultancy fees (including VAT @15%) Legal costs (including VAT @15%) Useful life of the intangible assets R1 440 000 R72 000 R144 000 R144 000 R96 000 R186 300 R62 100 5 years On 1 January 2024, the company expected the revenue from the license to decrease as the government gazetted new laws resulting in the release of more licenses into the market. This was an indication of possible impairment. Management prepared the following cash flow forecasts: Year Rands Discount factor 2024 372 000 0.8734 2025 300 000 0.7628 2026 258 000 0.6662 2027 234 000 0.5818 The market-related discount rate of the company is 14.5% The current gross selling price of the license in the market is The estimated net cost to sell is R1 140 000 R84 000
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