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Part A Freezo Limited is a manufacturing company situated in the Drakensburg area. The company has a 30 September financial year-end. The following details regarding the assets of the company are available. Air-Water Patent On 1 March 2023, Freezo Ltd signed an agreement with a French company to acquire a patent at a cost of €45 000 (Euros) to manufacture a machine that has the ability to convert normal air into water. All the risks and rewards associated with the patent were transferred to Freezo Ltd on the date of the agreement. The patent was available for use, as intended by management, on 31 March 2023. The cost price of the patent was paid in two equal instalments on 28 February 2024 and 28 February 2025. You can assume the transaction does not contain a financing component and that the delay in payments was due to international currency controls. The patent has an estimated useful life of 25 years and a residual value of Rnil was allocated to the patent. The following foreign exchange rates are applicable: Spot rate €1 = R 1 March 2023 21.22 31 March 2023 20.44 30 September 2023 21.56 28 February 2024 22.88 30 September 2024 21.75 Self-cooling bottle On 1 December 2023, Freezo Ltd commenced with research to develop a patent to manufacture self-cooling water bottles which can cool liquids without the use of refrigeration. On 1 May 2024 the directors of Freezo Ltd determined that all the criteria for the recognition of an internally generated intangible asset were satisfied and development of the patent commenced. On 31 July 2024, the development of the patent was completed. The following costs are, directly attributable to the patent and were incurred evenly from 1 December 2023 until 31 July 2024. Consumables R700 000 Electricity R268 000 Four scientists were involved during the research and development of the patent. Three of these scientists are permanent employees of the company and worked full time on the project throughout the research and development phase of the patent. An additional scientist, temporary employed on a contract basis, worked full time on the patent from 1 March 2024 until 30 June 2024. A permanently employed scientist earns a monthly salary of R40 000 whilst a temporary employed scientist's salary amounts to R35 000 per month. On 31 July 2023, Freezo Ltd purchased a specialised machine at a cost of R6 000 000 to be used for all research and development projects, including the "Self-cooling bottle" patent. The

Part A
Freezo Limited is a manufacturing company situated in the Drakensburg area. The company has a 30 September financial year-end.
The following details regarding the assets of the company are available.
Air-Water Patent
On 1 March 2023, Freezo Ltd signed an agreement with a French company to acquire a patent at a cost of €45 000 (Euros) to manufacture a machine that has the ability to convert normal air into water. All the risks and rewards associated with the patent were transferred to Freezo Ltd on the date of the agreement. The patent was available for use, as intended by management, on 31 March 2023. The cost price of the patent was paid in two equal instalments on 28 February 2024 and 28 February 2025. You can assume the transaction does not contain a financing component and that the delay in payments was due to international currency controls. The patent has an estimated useful life of 25 years and a residual value of Rnil was allocated to the patent.
The following foreign exchange rates are applicable:
Spot rate
€1 = R
1 March 2023 21.22
31 March 2023 20.44
30 September 2023 21.56
28 February 2024 22.88
30 September 2024 21.75
Self-cooling bottle
On 1 December 2023, Freezo Ltd commenced with research to develop a patent to manufacture self-cooling water bottles which can cool liquids without the use of refrigeration. On 1 May 2024 the directors of Freezo Ltd determined that all the criteria for the recognition of an internally generated intangible asset were satisfied and development of the patent commenced. On 31 July 2024, the development of the patent was completed.
The following costs are, directly attributable to the patent and were incurred evenly from 1 December 2023 until 31 July 2024.
Consumables R700 000
Electricity R268 000
Four scientists were involved during the research and development of the patent. Three of these scientists are permanent employees of the company and worked full time on the project throughout the research and development phase of the patent. An additional scientist, temporary employed on a contract basis, worked full time on the patent from 1 March 2024 until 30 June 2024. A permanently employed scientist earns a monthly salary of R40 000 whilst a temporary employed scientist's salary amounts to R35 000 per month.
On 31 July 2023, Freezo Ltd purchased a specialised machine at a cost of R6 000 000 to be used for all research and development projects, including the "Self-cooling bottle" patent. The

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