Mr. Sandro, a real estate developer, enters a contract with Arnold Reyes to sell a building for P1 million. Arnold intends to open a warehouse in the building for his sticky rice products. The building is in an area where new buildings face high levels of competition and Arnold has little experience in the rice treading industry. As a result, the contract price of P 100,000,000 is not probable as to its collectability. From the details above, can we account for the contract as a contract revenue from the customer?
Mr. Sandro, a real estate developer, enters a contract with Arnold Reyes to sell a building for P1 million. Arnold intends to open a warehouse in the building for his sticky rice products. The building is in an area where new buildings face high levels of competition and Arnold has little experience in the rice treading industry. As a result, the contract price of P 100,000,000 is not probable as to its collectability. From the details above, can we account for the contract as a contract revenue from the customer?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mr. Sandro, a real estate developer, enters a contract with Arnold Reyes to sell a building for P1 million. Arnold intends to open a warehouse in the building for his sticky rice products. The building is in an area where new buildings face high levels of competition and Arnold has little experience in the rice treading industry. As a result, the contract price of P 100,000,000 is not probable as to its collectability. From the details above, can we account for the contract as a contract revenue from the customer?
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