MN Plc's revenue as shown in its draft statement of profit or loss for the year ended 31 December 20X9 is GHS27m. This includes: (i) GHS8m for a consignment of goods sold on 31 December 20X9 on which MN Plc will incur ongoing service and support costs for two years after the sale. The cost of providing service and support is estimated at GHS800,000 per annum. MN Plc applies a 30% mark-up to all service costs. (ii) GHS4m collected on behalf of Aintree. MN Plc acts as an agent for Aintree and receives a 10% commission on all sales. At what amount should revenue be shown in the statement of profit or loss of MN Plc for the year ended 31 December 20X9? (Ignore the time value of money.) A. GHS22,920,000 B. GHS21,800,000 C. GHS20,520,000 D. GHS21,320,000

MN Plc's revenue as shown in its draft statement of profit or loss for the year ended 31 December 20X9 is GHS27m. This includes: (i) GHS8m for a consignment of goods sold on 31 December 20X9 on which MN Plc will incur ongoing service and support costs for two years after the sale. The cost of providing service and support is estimated at GHS800,000 per annum. MN Plc applies a 30% mark-up to all service costs. (ii) GHS4m collected on behalf of Aintree. MN Plc acts as an agent for Aintree and receives a 10% commission on all sales. At what amount should revenue be shown in the statement of profit or loss of MN Plc for the year ended 31 December 20X9? (Ignore the time value of money.) A. GHS22,920,000 B. GHS21,800,000 C. GHS20,520,000 D. GHS21,320,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 16CE

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Newmarket's revenue as shown in its draft statement of profit or loss for the year ended 31 December 20X9 is $27 million. This includes $8 million for a consignment of goods sold on 31 December 20X9 on which Newmarket will incur ongoing service and support costs for two years after the sale. The supply of the goods and the provision of service and support are separate performance obligations under the terms of IFRS 15 Revenue from contracts with customers. The cost of providing service and support is estimated at $800,000 per annum. Newmarket applies a 30% mark-up to all service costs. At what amount should revenue be shown in the statement of profit or loss of Newmarket for the year ended 31 December 20X9? (Ignore the time value of money.)
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