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Question - During the year ended 30 June 2021, JellStar Ltd acquired the following intangible assets:
a) A patent at a cost of $500,000. This patent allows the production of 200,000 units. During the year ended 30 June 2021, JellStar Ltd produced 40,000 units.
b) The right to use the trade name 'Kuma' in the local district for a cost of $700,000. Kuma is a highly recognized brand of fruit juicy that has been popular for mother 50 years and is expected to be popular indefinitely. As at 30 June 2021, it is considered that JellStar Ltd would easily be able to obtain $700,000 if it wanted to disposes of the trade name.
Required - Determined the amortization expenses for JellStar Ltd for the year ended 30 June 2021 and explain.
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