Instructions Use the five steps of revenue recognition from IFRS 15 to determine how Enterprise should account for this transaction. Also prepare the journal entries Enterprise will record for the first year, assuming that Millenium used the first of the four oil changes on November 10.
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- Problem 2 Erika Company operates lovaity program. The entity grants loyalty points for goods purchased. The loyalty points van be used by costumer in exchange for goods of the entity. The points have no expiry date. During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1, 00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based on stand-alone selling price. « Th i The award credits redeemed and the total award credits expected to be redeerned each year: Redeemed Expected to be Redeemed 2021 15,000 7,950 2,550 15.000 B0% 2022 85% 85% 90% 2023 2024 1. What amount should be reported as revenue points for 20217 A. 328, 125 B. 875,000 C. 700,000 D. 175,000 2. What amount should be reported as revenue frorn points for 2022? A. 472, 500 В. 4А, 375 C. 415, 625 D. 236, 250 3. What amount shauld be…Accounting for Special TransactionsConsignment Sales PROBLEM 4: MULTIPLE CHOICE - COMPUTATIONAL Yahama Co. consigns bass guitars costing P500,000 to a consignee. Yahama incurs P20,000 freight in transporting the goods to the consignee's place and P5,000 repair costs for minor damages during shipment. To induce the consignee in signing the consignment contract, Yahama pays the consignee an advanced commission of P100,000 to be deducted from the consignee's actual commission on future sales. How much is the cost of the consigned goods in Yahama's and the consignee's books? Yahama Consignee A. 520, 000 0 B. 525,000 0 C. 520, 000 100,000 D. 625,000 0Item 7 Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a commission of 20% of the selling price on any merchandise sold. During the year, Mogul ships inventory with a cost of $80,000 to Ski Outfit and pays shipping costs of $8,000. By the end of the year, $60,000 of the merchandise has been sold to customers for a total of $85,000. Mogul allocates $6,000 of the shipping costs to inventory sold and the other $2,000 to inventory not sold. Mogul also paid advertising costs during the year of $10,000. What amount of inventory will Mogul report at year end? Multiple Choice $20,000. $22,000. $42,000. $52,000.
- Pina Colada Corp. purchased a delivery van with a $55000 list price. The company was given a $4200 cash discount by the dealer and paid $3100 sales tax. Annual insurance on the van is $1200. As a result of the purchase, by how much will Pina Colada Corp. increase its van account? $53800. $55000. $50800. $53900.Problem 2-13 (IAA) Clam Company offers customers a pottery cereal bowl if they send in three boxtops from its products and P10. The entity estimated that 60% of the boxtops will be redeemed. During the current year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P25. 1. What is the premium expense for the current year? a. 2,025,000 b. 6,075,000 c. 4,550,000 d. 1,650,000 2. What is the liability for outstanding premiums at year-end? a. 250,000 b. 375,000 c. 625,000 d. 875,000Assume that Kwek-kwek Corp. participates in a customer loyalty program operated by Suka Corporation where it grants 1 point for every P200 spent on its oil products. Accumulated points by customers from Kwek-kwek Corp. may be used to settle part or in full any merchandise purchased from Suka Corporation. Kwek-kwek Corp. pays Suka P1 for each point redeemed. In 2021, total sales of the Kwek-kwek Corp. amounted to P10,000,000. Only 45% of the 100% expected total points granted were redeemed by the customers from Suka Corporation which was used to fully settle the purchase of goods during the year. How much is the expense to be recognized by Kwek-kwek in 2021 related to the transaction?
- Problem 2: JIN Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of P25. Distribution cost is P10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, P50 per unit 2,875,000 360,000 2,500,000 Towel purchases, P90 per unit Number of box tops returned 337,500 22,500 38,550 Requirements: 4. Compute for the premiums (as an asset) amount for the year ended: A. December 31, 2020 B. December 31, 2021Crane Company buys a delivery van with a list price of $55000. The dealer grants a 12% reduction in list price and an additional 1% cash discount on the net price if payment is made in 30 days. Sales taxes amount to $750 and the company paid an extra $650 to have a special device installed. What should be the recorded cost of the van? O $49316. O $48666. O $47916. O $49302.Obra Ltd is your client. It has adopted IFRS as the financial reporting framework and has asked you to assist in dealing with the following issues. On I January 2014 Obra Ltd acquired a machine under the following terms. Manufacturer's base price GHS1,050,000 Trade discount (applying to base price only) 20% Early settlement discount taken (on the payable amount of the base cost only) 5% Freight charges GHS 30,000 Electrical installation cost GHS 28,000 Staff training in use of machine GHS 40,000 Pre-production testing GHS 22,000 Purchase of a three-year maintenance contract GHS60,000 Estimated residual value GHS 20,000 Estimated life in machine hours 6,000 hours Hours used -year ended 31 December 2014 - 1,200 hours - year ended 31 December 2015 1,800 hours - year ended 31 December 2016 (see below) 850 hours On I January 2016 Obra Ltd decided to upgrade the machine by adding new…
- Q3: Oman Manufacturing Company a handicraft manufacturer printed the price of its goods as RO 120 per handicraft. Manufacturer allowed a discount of 30% to the wholesaler who in his turn allowed a discount of 20% on the printed price to the retailer. If the prescribed rate of VAT on the goods is 15% and the retailer sells it to the consumer at the printed price then:a) Find the value added tax paid by the wholesaler and the retailer. b) Find the price including value added tax paid by the customer to buy the handicraft. c) Find the amount of tax collected by the government from wholesaler and retailer. d) If wholesaler had sold the product at printed price to retailer and no discount has been offered, retailer would have made more profit?. Discuss with reasons Note: only solve the last remaining question please.Great American Oilchange (GAO) sells a combined oil change service and parts package for $40. A customer who supplies the parts (oil and filter) is charged $30 for only the service, whereas a customer who buys only the oil and filter (for do-it-yourself use) is charged $30 for the parts. The parts cost GAO $24. CP6-4 (Algo) Part 1 Required: 1. Determine the dollar amount of revenue from the oil change service versus the sale of parts for each combined oil change package. TIP: To calculate the percentage of the combined package that relates to the service, divide the stand- alone selling price of the service by the combined stand-alone selling prices of both the service and parts. Parts Service Allocated Transaction Price 234 $ 8 9 J 1/ deleQ3: Oman Manufacturing Company a handicraft manufacturer printed the price of its goods as RO 120 per handicraft. Manufacturer allowed a discount of 30% to the wholesaler who in his turn allowed a discount of 20% on the printed price to the retailer. If the prescribed rate of VAT on the goods is 15% and the retailer sells it to the consumer at the printed price then:a) Find the value added tax paid by the wholesaler and the retailer. b) Find the price including value added tax paid by the customer to buy the handicraft. c) Find the amount of tax collected by the government from wholesaler and retailer. d) If wholesaler had sold the product at printed price to retailer and no discount has been offered, retailer would have made more profit?. Discuss with reasons