Falcon Ltd is a software company and in on 1st of Oct 2020 it sold its software product to Mira Ltd for a total of £600,000 which includes the provision of support service for the next 3 years. Without a support service, a software is sold to other customers at £460,000. Support service can be provided separately at £80,000 per year. Required: Explain how this transaction should be accounted for in financial statements for year ending 31 Dec 2020. Note: Ignore any discounting.
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- Bahag-Hari company provided you the following sales transactions as of December 31,2021:· On January 1,2020, Bahag-Hari Company sold a Machinery for P5,000,000 to Orange Company. Orange Company paid P500,000 down and signed a noninterest-bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The carrying value of the machinery is P5,700,00.· A notes receivable of P1,000,000 with a coupon rate of 12% from Pula Company was received from sale of goods in the normal course of business. The note is dated May 1,2021 and due on May 1,2024. Interests are collectible every May 1.· A three-year note of P200,000 with contract rate of 10% received from Dilaw Corporation dated January 1,2021 was accepted in exchange for consultation services rendered. The note is considered to have prevailing market rate 12%. Interest are collectible every December 31. The prevailing rate of interest for the above type of notes was 12%.…Zigzag Ltd has prepared its draft financial statements for the year ended 30 June 2022. It has included the following transactions in revenue at the amounts stated below. Which of these have been correctly in revenue according to IFRS 15 Revenue from Contracts with Customers? A Agency sales of £300,000 on which Zigzag is entitled to a commission of 10% B Sale proceeds of £40,000 for motor vehicles which were no longer required by Zigzag C Sales of £200,000 on 30June 2022. The amount invoiced to and received from the customer was £230,000, which includes £30,000 for ongoing servicing work to be done by Zigzag over the next two years D Sales of £250,000 on 1 July 2021 to an established customer who, with the agreement of Zigzag, will make full payment on 30 June 2023. Zigzag has a cost of capital of 10%Bahag-Hari company provided you the following sales transactions as of December 31,2021:· On January 1,2020, Bahag-Hari Company sold a Machinery for P5,000,000 to Orange Company. Orange Company paid P500,000 down and signed a noninterest-bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The carrying value of the machinery is P5,700,00.· A notes receivable of P1,000,000 with a coupon rate of 12% from Pula Company was received from sale of goods in the normal course of business. The note is dated May 1,2021 and due on May 1,2024. Interests are collectible every May 1.· A three-year note of P200,000 with contract rate of 10% received from Dilaw Corporation dated January 1,2021 was accepted in exchange for consultation services rendered. The note is considered to have prevailing market rate 12%. Interest are collectible every December 31. The prevailing rate of interest for the above type of notes was 12%.…
- Bahag-Hari company provided you the following sales transactions as of December 31,2021:· On January 1,2020, Bahag-Hari Company sold a Machinery for P5,000,000 to Orange Company. Orange Company paid P500,000 down and signed a noninterest-bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The carrying value of the machinery is P5,700,00.· A notes receivable of P1,000,000 with a coupon rate of 12% from Pula Company was received from sale of goods in the normal course of business. The note is dated May 1,2021 and due on May 1,2024. Interests are collectible every May 1.· A three-year note of P200,000 with contract rate of 10% received from Dilaw Corporation dated January 1,2021 was accepted in exchange for consultation services rendered. The note is considered to have prevailing market rate 12%. Interest are collectible every December 31. The prevailing rate of interest for the above type of notes was 12%.…1) Tappa Corp.'s current liabilities at December 31, 2020, totaled P1,600,000 before any necessary year- end adjustments. On December 28, 2020, Tappa purchased and received goods for P300,000 terms 2/10, n/30. The invoice was recorded and paid January 2, 2021. What amount should Tappa report as total current liabilities in its December 31, 2020 statement of financial position?DO NOT GIVE ANSWER IN IMAGE FORMAT On the 1st January 2018, Alpha Company sells a building to Omega Ltd for £1,000,000 cash. The carrying amount of the building prior to the sale was £750,000. Alpha arranges to lease the building back for 5 years at £150,000 per annum, payable in arrears. The remaining useful life of the building is 25 years. The transaction satisfies the performance obligations in IFRS 15, so will be accounted for as a sale and leaseback transaction. At the date of sale, the fair value of the building was £900,000, and the implied interest rate is 10%. In relation to Alpha Company: (a) How much of the lease liability relates to the actual terms of the lease, and how much relates to additional financing received? (b) What is the right-of-use value of the building? (c) What is the value of the gain on the transfer of the rights transferred due to the selling price being higher than the fair value
- Excelsior Corporation has the following headings on its December 31, 2019 Balance Sheet: Total Current Assets $200,000 Total Assets $500,000 Total Current Liabilities $169,000 Total Non Current Liabilities $300,000 On January 2020 Excelsior sells temporary investments to pay off $56,400 in long term debt Required 1: How much will working capital increase (decrease) by when comparing December 2019 with January 2020? Required 2: If no other transaction took place in January 2020, the current ratio at the end of January 2020 is: Required 3: If no other transaction took place in January 2020, the debt to equity ratio at the end of January 2020 is: Required 4: If no other transaction took place in January 2020, the financial leverage in January 2020 is (calculate the Equity Ratio and not the Equity Ratio percentage): Required 5: If last 12 month sales as of January 2020 amount to $480,000, the working capital turnover for the period ended January 31st 2020 is:Fusilli plc operates a business building and selling high-tech specialised machinery that takestwo years to build. Delivery and legal title to the machinery passes to the customer onceconstruction is complete.On 1 October 2020 Fusilli entered a contract to sell one of its machines to Orzo for £955,000 withpayment on completion in two years. Alternatively, Orzo can pay £850,000 on signing thecontract. The difference in price is equivalent to a 6% borrowing rate. The customer decides topay up front, and pays £850,000 on 1 October 2020Fusilli has a 30 September 2021 year end.(i) When should Fusilli recognise the revenue on this contract? Explain your rationale.(ii) Determine the amount that IFS 15 would consider to be the transaction price of thecontract. (iii) How should the difference between the two contract prices be accounted for in theStatement of profit or loss and Statement of financial position over the contract?Fusilli plc operates a business building and selling high-tech specialised machinery that takestwo years to build. Delivery and legal title to the machinery passes to the customer onceconstruction is complete.On 1 October 2020 Fusilli entered a contract to sell one of its machines to Orzo for £955,000 withpayment on completion in two years. Alternatively, Orzo can pay £850,000 on signing thecontract. The difference in price is equivalent to a 6% borrowing rate. The customer decides topay up front, and pays £850,000 on 1 October 2020Fusilli has a 30 September 2021 year end.(i) Show the accounting entries (using either debits and credits or the expandedaccounting equation) for the year ended 30 September 2021
- On October 10, 2020, Executor Co. entered into a contract with Belisle Inc. to transfer Executor's specialty products (sales value of $10,000, cost of $6,500) on December 15, 2020. Belisle agrees to make a payment of $5,000 upon delivery and signs a promissory note to pay the remaining balance on January 15, 2021. What entries does Executor make in 2020 on this contract? Ignore time value of money considerations.A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (Year-end) is sold on the 31 March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30 June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on 31 March 2021. Journal narrations are required. Document numbers are not required.A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (year end) is sold on the 31st March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30th June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on the 31st March 2021. Journal narrations are required. Document numbers are not required.