Question: Lumin Ltd is a mid-size database system developer. Lumin signed a contract with Xenon Ltd to develop a database system (both hardware and software) for Xenon Ltd on 1 February 2024. The agreement states that the total consideration to be paid for the system will be $430,000. Lumin Ltd expects that its total costs for the system will be $335,000. By the end of its reporting period, 30 June 2024, Lumin Ltd had incurred wages cost of $65,000 and materials costs of $180,000 associated with the project. Of the materials costs, $30,000 is in respect of materials that have not yet been used on the system. Of the wages cost, $12,500 is an advance payment to subcontractors who had not performed their work on the project as at 30 June 2024. As at 30 June 2024, Xenon Ltd had made progress payments to Lumin Ltd of $250,000. Lumin Ltd calculates the measurement of progress using input methods in accordance with AASB15/IFRS 15. Required: A) Calculate the revenue to be recognised by Lumin Ltd for the year ended 30 June 2024. Show all workings. B) Prepare all journal entries to record the transactions described. Assume all of Lumin Ltd's costs are paid for in cash. C) Calculate the Profit to date on the contract as at 30 June 2024.
Question: Lumin Ltd is a mid-size database system developer. Lumin signed a contract with Xenon Ltd to develop a database system (both hardware and software) for Xenon Ltd on 1 February 2024. The agreement states that the total consideration to be paid for the system will be $430,000. Lumin Ltd expects that its total costs for the system will be $335,000. By the end of its reporting period, 30 June 2024, Lumin Ltd had incurred wages cost of $65,000 and materials costs of $180,000 associated with the project. Of the materials costs, $30,000 is in respect of materials that have not yet been used on the system. Of the wages cost, $12,500 is an advance payment to subcontractors who had not performed their work on the project as at 30 June 2024. As at 30 June 2024, Xenon Ltd had made progress payments to Lumin Ltd of $250,000. Lumin Ltd calculates the measurement of progress using input methods in accordance with AASB15/IFRS 15. Required: A) Calculate the revenue to be recognised by Lumin Ltd for the year ended 30 June 2024. Show all workings. B) Prepare all journal entries to record the transactions described. Assume all of Lumin Ltd's costs are paid for in cash. C) Calculate the Profit to date on the contract as at 30 June 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question:
Lumin Ltd is a mid-size database system developer. Lumin signed a contract with Xenon Ltd to develop a database system (both
hardware and software) for Xenon Ltd on 1 February 2024. The agreement states that the total consideration to be paid for the
system will be $430,000. Lumin Ltd expects that its total costs for the system will be $335,000.
By the end of its reporting period, 30 June 2024, Lumin Ltd had incurred wages cost of $65,000 and materials costs of $180,000
associated with the project. Of the materials costs, $30,000 is in respect of materials that have not yet been used on the system.
Of the wages cost, $12,500 is an advance payment to subcontractors who had not performed their work on the project as at 30
June 2024.
As at 30 June 2024, Xenon Ltd had made progress payments to Lumin Ltd of $250,000. Lumin Ltd calculates the measurement
of progress using input methods in accordance with AASB15/IFRS 15.
Required:
A) Calculate the revenue to be recognised by Lumin Ltd for the year ended 30 June 2024. Show all workings.
B) Prepare all journal entries to record the transactions described. Assume all of Lumin Ltd's costs are paid for in cash.
C) Calculate the Profit to date on the contract as at 30 June 2024.
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