Topic: REVENUE FROM CONTRACTS WITH CUSTOMERS Requirements: a. Identify the performance obligations in the contracts. b. How should the entity recognize revenue
Q: t contract inception, PFRS 15 requires an entity to determine how the performance obligations…
A: Contract is a legal document or agreement between the two parties with their mutual obligation.
Q: The following certain attributes present into a contract to determine whether the arrangements with…
A: Revenue can be recognized when there is a contract with the customers and performance obligation has…
Q: Based on the requirements and guidance of IFRS 15, one of the following is not considered part of…
A: Under the contract costing, there is an agreement made between two parties in respect of performing…
Q: Demonstrate revenue recognition for long-term contracts, both at a point intime when the contract is…
A: Long term contracts usually qualify for revenue recognition over time. We recognise revenue over…
Q: Which of these three characteristics (I, II, and III) are required in order for a promised good or…
A: Promised goods or services will be considered distinct if: When it is capable to being distinct…
Q: When recognizing revenue, a company has satisfied its performance obligation when the company has O…
A: The concept of Revenue recognition applies to both goods and services.
Q: How do companies account for long-term contracts that qualify for revenue recognition over time?
A: The companies use the following two methods to record the long term contract when it turns out to be…
Q: Unconditional rights to receive consideration because a performance obligation has been satisfied…
A: Introduction:- Accounts receivable should be recorded when no extra performance commitments are…
Q: consignor satisfies its performance obligation under consignment contract?
A: Consignment sales are sales made by the one person (consignee) on behalf of the other person…
Q: 1. Should the two contracts be combined for purposes of applying the five-step revenue recognition…
A:
Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…
A: The percentage of completion method is an accounting technique in which long-term deed income and…
Q: vable is reasonably assured, what is the net income to be recognized by the entity for the year…
A: Franchise Account The Purpose of providing the franchise business to allow to use the reputation of…
Q: I. PFRS 15 provides that where a contract with a customer has multiple performance obligations, an…
A: As per PFRS 15 revenue from contract with customers, it is based on 5 step model. Identify the…
Q: Identify the proper accounting for losses on long-term contracts.
A: Revenue recognition: Revenue recognition principle states that every business organization should…
Q: Under PFRS 15, how shall revenue from contracts with customers such as revenue from initial…
A: In order to take the franchise, the prior thing is to enter into the franchise contract. There are…
Q: Under - PFRS 15, when shall entity recognize revenue from contract with customers? Select the…
A: The revenue should be satisfied only when the services or goods that have been transferred at a…
Q: How does PFRS 9 distinguish between the measurement methods to be used in the standard? * By…
A: By reviewing the business model of each entity and the contractual cash flow characteristics of the…
Q: age of time B. Completion of percentage of a project C. Performan
A: Revenue refers to the sum value of money gained by a business by selling its goods or services in…
Q: According to IAS 37 - Provisions, Contingent Liabilities, and Contingent Assets choose two of the…
A: IAS 37 is accounting standard which deals and provides guidelines about provisions and the…
Q: When the outcome of a construction contract cannot be estimated reliably, how shall contract revenue…
A: when the outcome of a construction contract can be estimated reliably, contract revenue and contract…
Q: Partial satisfaction of a multiple performance obligation is reported on the balance sheet asa.…
A: Performance obligation: A performance obligation is a promise made by a seller to transfer the goods…
Q: Under PFRS 15, which of the following factors indicates that the revenue from contracts with…
A: Under IFRS 15 A performance obligation is on the seller or service provider who has an obligation…
Q: Explain the doctrine of the indoor management rule in relation to a company entering into a…
A: It is often seen that the outsiders who contracts with the companies used to face…
Q: _____ are the entity’s present obligations arising from past events, the settlement of which is…
A: Solution: Liabilities are the entity’s present obligations arising from past events, the settlement…
Q: For an SME, revenue shall arise on all of the following transactions and events except a. Sale of…
A: IAS 18 states that the revenue shall be aroused when the sale of goods or providing of service is…
Q: Unconditional rights to receive consideration because a performance obligation has been satisfied…
A: Lets understand the meaning of term given. As per IFRS 15" Revenue from the contract with the…
Q: Explain how to account for revenue on a long-term contract over time as opposed to at a point in…
A: The revenue recognition principle: The revenue recognition principle refers to the revenue that…
Q: When it is probable that total contract costs will exceed total contract revenue, how shall the…
A: IAS 11 prescribes the contractor’s accounting treatment of revenue and costs associated with…
Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…
A: Long term contracts are those contracts which are related to construction of building. Usually long…
Q: When it is probable that total contract costs will exceed total contract revenue, how shall it be…
A: Contract account is prepared when the work to be done take substantial time to make (generally more…
Q: When a revenue arrangement involves more than one performance obligation, which of the following…
A: Solution: When a revenue recognition involves more than one performance obligation "Whether each…
Q: The new standard, Revenue from Contracts with Customers, recognizes revenue based on a(n):…
A: Solution: The new standard, Revenue from Contracts with Customers "adopts an asset-liability…
Q: Describe the conditions when contract assets and liabilitiesare recognized and presented in…
A: Contract assets: It is the right of the firm to receive payment for the goods transferred or…
Q: allocated to the award credits when it fulfils its obligations in respect of the awards. a. All…
A: Correct option is c i.e 2nd statement is incorrect while the 1st statement is correct Explanation:
Q: Choose three out of six differences on page 55, (attached) and, for each of these three differences,…
A: US GAAP is preferred over IFRS due to the following reasons of difference:Shipping and handling…
Q: Any of the following criteria is considered satisfaction by an entity of performance obligation over…
A: As per IFRS 15, An entity transfers control of a good or service over time and, therefore, satisfies…
Q: 33. Entity A enter into a long-term contract to provide service. The outcome of the transaction can…
A: Long term contract of service are those contracts in which there is an agreement between two parties…
Q: d. when the entity's right to receive payment is established. 2. Entity A enters into a long-term…
A: ●2.Entity A enters into a long-term contract to provide services. The outcome of the transaction can…
Q: A note payable is in the form of Select one: a. a contingency that is reasonably likely to occur. b.…
A: The balance sheet is the statement of financial position of the business.
Q: Assuming the requirements for recognizing revenue over time are met, the profit to be recognized in…
A: Under construction contract, the profit is recognised on the basis of the costs incurred during the…
Q: Under PFRS 15, when shall a consignor recognize revenue from its consignment sales? A When the…
A: SOLUTION- PERFORMANCE OBLIGATION IS A PROMISE TO DELIVER THE GOODS OR SERVICES IN LIEU OF PAYMENT…
Q: Step 1 of the "five-step model" states that certain conditions must be satisfied before an entity…
A: Answer - Correct Option is Option C - It is certain that the entity will collect the consideration…
Q: A. an agreement between a private sector entity and a contractor for the supply of goods or services…
A: Contractor A contractor can be an individual or a company that will undertake to do specific work…
Q: Franchise revenue are recognized over time if: a. Franchise rights are transferred with a right to…
A: This question deals with the revenue recognition of franchise. In franchise revenue, revenue needs…
Topic: REVENUE FROM CONTRACTS WITH CUSTOMERS
Requirements:
a. Identify the performance obligations in the contracts.
b. How should the entity recognize revenue from the contract? (State also the timing of revenue recognition for each identified performance obligation.)
Step by step
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- In 20x1, Devin Co. enters into a contract to construct a building for a customer. Devin Co. identifies its peromance obligation to be satisfied over time. Devin CO. measures its progress on the contract based on ccosts incurred. The contract price is P10M. Devin has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is provided below: 20x1 20x2 20x3 a. Contract costs incurred to date 3,150,000 5,680,000 7,120,000 b. Biliings per year 4,000,000 5,000,000 1,000,000 c. Collections on billings per year 3,600,000 4,500,000 1,900,000 d. Estimated Costs to complete 3,850,000 1,420,000 Requirements: a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2, 20x3, respectively. b. Provide the journal…In 20x1, Devin Co. enters into a contract to construct a building for a customer. Devin Co. identifies its peromance obligation to be satisfied over time. Devin CO. measures its progress on the contract based on ccosts incurred. The contract price is P10M. Devin has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is provided below: 20x1 20x2 20x3 a. Contract costs incurred to date 3,150,000 5,680,000 7,120,000 b. Biliings per year 4,000,000 5,000,000 1,000,000 c. Collections on billings per year 3,600,000 4,500,000 1,900,000 Requirements: a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2, 20x3, respectively. b. Provide the journal entries under (i) traditional accounting and (ii) PFRS 15. c.…On July 1, 20x1, ABC Construction Co. enters into contract with a customers for the construction of a building. The contract prices is P6M, which is to be billed to the customers periodically based on ABC's progress on the construction . The estimated total contract cost is P4M. The actual costs incurred in 20x1 amounts to P1.2M. 1. The revenue to be recognized in 20x1
- In 20x1, Electrified Construction Co. enters into a contract to construct a building for a customer. Electrified indentifies its performance obligation to be satisfied over time. Electrified measures its progress on the contrat based on costs incurred. The contract price is P20M. Electrified has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 a. Contract costs incurred per yr. 8,160,000 7,320,000 1,920,000 b. Billings per year 10,000,000 7,000,000 3,000,000 c. Collections on billings per year 9,500,000 6,650,000 3,850,000 Requirements: a. Compute for the gross profits, revenues, and costs of construction in 20x1, 20x2 and 20x3, respectively. b. Provide the journal entries under (i) traditional accounting…1. In 20x1, Electrified Construction Co. enters into a contract to construct a building for a customer. Electrified identifies its performance obligation to be satisfied over time. Electrified measures its progress on the contract based on costs incurred. The contract price is P20M. Electrified has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 a. contract cost incurred per yr. 8,160,000 7,320,000 1,920,000 b. billings per year 10,000,000 7,000,000 3,000,000 c. collections on billings per year 9,500,000 6,650,000 3,850,000 d. estimated costs to complete 8,840,000 1,720,000 (at each yr. end) a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2 and 20x3, respectively. b. Provide the journal entries under (i) traditional accounting and (ii) PFRS…In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 Contract costs incurred per year Billings per year Collections on billings per year 1,920,000 3,000,000 5,650,000 3,850,000 8,160,000 7,320,000 10,000,000 500,000 6600,000 Estimated costs to complete (at each year-end) from the Student Ha8,840,000 1,720,000 ons, quizzes rection with any academic work, abetting of the same: 1st violation How much profit is recognized on the contract in 20x3?
- At the beginning of the current year, an entiry sogned a 5 year contract enabling it to use a patented manufacturing process beginning in the current year. a royalty is payable for each product produced, subject to a minimum will be paid annually. on the contract date, the entity prepaid a sum equal to two years minimum annual fees. in the current year, only minimum fees were incurred. the royalty prepayment shall be reported in the current year-end financial statement as a. an expenseb. a current asset and an expensec. a current asset and noncurrent assetd. a noncurrent asset EXPLAINIn 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 Contract costs incurred per year Billings per year Collections on billings per year Estimated costs to 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 complete (at each year-end) 8,840,000 1,720,000 How much profit is recognized on the contract in 20x3?On March 1, 2021, AST Corporation contracted to build two buildings for a total contract price ofP27M. The contract specifies that payment will only occur after both buildings have beencompleted and transferred to the client. The stand-alone selling price of the Building No. 1 is20M and Building No. 2 is P10M. On December 1, 2022, Building No. 1 was completed andtransferred, the journal entry to record this transaction include a debit to: *Contract asset, P18MCost of construction, P18MAccount receivable, P20MContract asset, P20M
- Customer X enters into a contract with Supplier Y for the use of a specific car for one (1) year. The car shall be modified according to the specification of Customer X . Customer x shall have exclusive use of the car during the duration of the contract. If at any time the car is not working properly, Supplier Y shall provide a replacement power of the same type. Supplier Y cannot retrieve the car during the duration of the contract for reasons other than default of Customer X. At the time of signing of contract, Supplier Y does not yet have the car described in the contract. Requirement: Identify if the contract is (or contains) a lease using the guidance in PFRS 16. Provide a brief explanation. Make it brief and concise. Explain it in a simple way. 3 sentences is enough. PLEASE NO PLAGIARISM I WILL REPORT YOU!In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 Contract costs incurred per year Billings per year Collections on billings 20x3 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 per year Estimated costs to 1911 complete (at each year-end)er from the Student Ha8,840,000 of 1,720,000 "Cheating during examinations, quizzes or plagiarism in connection with any academic work, abetting of the same: 1st violation- How much profit is recognized on the contract in 20x3? suspension with invalidation of grade; 3rd violation- suspensionOn May 1, 2025, Hall Inc. entered into a contract to deliver one of its specialty mowers to Sandhill Landscaping Co. The contract requires Sandhill to pay the contract price of $965 in advance on May 15, 2025. Sandhill pays Hall on May 15, 2025, and Hall delivers the mower (with cost of $651) on May 31, 2025. (a) Prepare the journal entry on May 1, 2025, for Hall. (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 Account Titles and Explanation May 1, 2025 eTextbook and Media List of Accounts Save for Later Debit Attempts: 0 of 5 used Credit Submit Answer