As a distributor, SH Bhd has to make sure that healthcare provider prescribes gets to the righthospital, pharmacy or other healthcare facility safely, securely and reliably. Thus, for the past 10months, SH Bhd has been conducting a research in developing a revolutionary new system toenhance the efficiency of its existing distribution system. SH Bhd believes this project will be asuccessful one and there are a few distributors companies who also show their interest to buy thissystem. The cost to patent this system when its ready is estimated at RM70,000. So far, SH Bhdhas incurred RM175,000 to finance this project. However, as of company's year-end (December31), this new system has not been marketed. This is due to an error which requires substantialamount of work by the researchers to fix the problemREQUIRED:Explain the accounting treatment for the cost incurred by SH Bhd to develop new distributionsystem in accordance to MFRS 138 Intangible Assets. Prepare the journal entry to record thetransaction for SH Bhd.

MFRS 138: MFRS 138 states the rules relating to the recording of intangible assets. It states that…

Answered: hospital, pharmacy or other healthcare…

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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