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- On 1 January 2022 (the contract date), Furniture Ltd sold R1 200 000 worth offurniture to a new housing development in Centurion. Furniture Ltd immediatelycredited their sales revenue with the R1 200 000. Included in the sales contract, wasa complementary servicing arrangement in which Furniture Ltd would provide thecustomer with annual servicing of the furniture (in case of any breakages ormanufacturing faults) for a period of three years from the date of the contract.The normal selling price of the furniture without any annual servicing is R1 400 000.The normal price charged to customers for annual servicing is R14 000.REQUIRED:Calculate the amount of revenue that Furniture Ltd should recognise, for thefinancial year end of 30 June 2022, with respect to the transaction above.Ignore the time value of money and VAT.On July 1, 2021, S Furniture, sold to B tables and chairs for a price of P500,000 for the latter's café and restaurant. B will pay 50% upon delivery and the balance will be paid on June 30, 2022. The goods were delivered to B and the 50% down payment was made by B, but the parties stipulated that the ownership over the books does not pass to B, until full payment of the price. The day before June 30, 2022, the restaurant of B was gutted by fire together with the tables and chairs purchased from S. On June 30, 2022, S demanded payment from B. B contends that he is no longer liable for the balance, because ownership was retained by S, thus, following the res perit domino rule, S should bear the risk of loss. Is B correct. Give reason/s.M issues a negotiable BOE payable to P or order for P10,000. P endorsed the instrument to A, then A to B, then B to C, then C to D. D presents the instrument to the drawee, but the drawee dishonored the instrument. From whom can D seek immediate recourse?
- On January 1, GEN enters into a contract with LORD for the sale of a high-end security scanner for P630,000. The contract includes a put option the obliges GEN to repurchase the scanner machine from LORD for P567,000 on or before December 31. The market value is expected to be P495,000 on December 31. LORD pays GEN P630,000 on January 1. The transaction should be accounted for as a:A. Sale C. No sale/leaseB. Lease D. Cannot be determined PLEASE SHOW HOW THE ANSWER WAS FORMULATED WITH COMPLETE SOLUTION IN GOOD ACCOUNTING FORM.Mott Company purchases a machine from Janelle Company. Installation of the machine requires specialized knowledge that Mott Company does not possess. Janelle Company regularly includes installation as part of its sales contracts. The machine has a stand-alone price of $50,000, and the value of the installation is estimated to be $5,000. Mott agrees to purchase the machine for $50,000. How much of the contract price should be allocated to the machine and installation respectively?Mr. Waqas obtains an asset under Ijarah from an Islamic bank. The asset has a value at the start of the contract of PKR 68,000 and is estimated to have a useful economic life of 3. The contract starts on 1 January Year 1 and lasts 3 years; the trader does not have the option to cancel the contract early. The trader agrees to pay equal monthly installments, and the first payment made by the trader will be at the start of the contract. Furthermore, the trader will pay the residual value at the end of the third year and will purchase the asset. The estimated value of the asset after 3 years is PKR 10,000, and this is also the guaranteed minimum value of the asset at the end of year 3. The profit rate by the bank is 10%. Required: Calculate monthly payments and Islamic Bank’s profit
- In the year 20X1, a lawsuit erupts between TK and its supplier KT. The legal dispute is expected to result in legal costs of EUR 15,000. The process will continue and be decided in the year 20X2. In February 20X2 comes an invoice for the legal costs of EUR 12,000. TK will settle the bill in April. Which of the following posting records result/result in the years 20X1 or 20X2 from the business transactions mentioned? Otherwise. Verb. 15.000 EUR an Bank 15.000 EUR O In the year 20X1 no booking is necessary. accruals 15.000 EUR an Otherwise. Verb. 12.000 EUR period fr. income 3.000 EUR accruals 15.000 EUR an Otherwise. Verb. 15.000 EUROn January 1, 2025, Cullumber Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $5,000. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Cullumber identifies two performance obligations and allocates $1,750 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $850; the shelves have a cost of $490. (a) Prepare the journal entry on January 1, 2025, for Cullumber. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date January 1, 2025 Account Titles and Explanation eTextbook and Media List of Accounts Debit CreditOn January 1, 20x1, Pongcuter Co. enters into a contract with a customer to grant a software licensefor ₱1,000,000. The fee is payable at contract inception. The license has a term of four years, toreckon from the date the customer can use the software. The customer can determine how andwhen to use the right without further performance by Pongcuter Co. and does not expect thatPongcuter Co. will undertake any activities that significantly affect the intellectual property towhich the customer has rights. The software is transferred to the customer on February 1, 20x1.However, the code, which is necessary for the customer to use the software, is transferred only onApril 1, 20x1. How should Pongcuter Co. recognize revenue from the fixed consideration in thecontract?a. in full on February 1, 20x1b. in full on April 1, 20x1c. deferred and amortized over four years starting on February 1, 20x1d. deferred and amortized over four years starting on April 1, 20x1
- Zoro Company enters into a contract to sell Product A and Product B on July 1, 2020 for an upfront cash payment of P250,000. Product A will be delivered at the end of the year, and Product B will be delivered the following year. Zoro Company sells Product A for P80,000 and Product B for P240,000. 1. How many performance obligations are there in the contract? 2.what is the transaction price? 3.how much is revenue to be recognized in 2020? 4. how much is revenue to be recognized in 2021?7. Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. The following shall be accounted as part of the consigned inventory of the…On 1 January 2020, Entity A sold 100 units of Product X to Entity B for $220 per unit payable on 31 December 2020. On the same date, the cash selling price of one Product X is $200. The customer obtained control of the product at contract inception. However, the contract permits the customer to return the product within 90 days, i.e. on or before 31 March 2020. Product X is a new product. It suffers insufficient testing before the sales to Entity B on 1 January 2020. Thus, Entity A has no relevant historical evidence of product returns or other available market evidence. On 31 March 2020, 15 units of Product X was returned. On 31 December 2020, all outstanding amount was settled. The cost of one Product X is $150. The end or reporting period of Entity A is 31 December. REQUIRED: Provide journal entries for Entity A from 1 January 2020 to 31 December 2020 under relevant accounting standards. ACCOUNTS FOR INPUT: | Bank | Payable | Receivable | Interest expense | Interest revenue |…
