Question 1 20 Marks (36 Minutes) Croxley Limited entered into two separate revenue transactions with two different customers on 1 January 2019, details of which, determined at contract inception, are presented below: | | Customer A | Customer B | | :--- | :--- | :--- | | Contract price | N$450,000 | N$450,000 | | Early settlement discount (Note 1) | 10% | N/A | | Rebate (Note 2) | N/A | N$26,500 | | Goods delivered | 1 January 2019 | 1 January 2019 | | Payment due | 31 January 2019 | 31 December 2020 | Note 1: Croxley Limited expects customer A to pay within the required period and thus to qualify for the settlement discount. Note 2: The rebate offered to customer B is dependent on customer B complying with certain terms and conditions. Croxley expects that the customer will comply with these terms and conditions and thus that the rebate will be granted. This rebate is considered to be a price reduction. The appropriate discount rate, determined at contract inception, is 10%. Required: a) Provide the definition of transaction price in terms of IFRS 15. (3) b) Calculate the transaction price for the contract involving customer A and provide the journals for the year ending 31 December 2019. (6) c) Calculate the transaction price for the contract involving customer B and provide the journals for the years ending 31 December 2019 and 2020 assuming the effect of financing is considered significant. (11) Journal narrations are not required.
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The transaction price can be a fixed amount, but it may sometimes include variable consideration or consideration in a form other than cash. b) For customer A, the contract price is N$450,000. However, Croxley Limited expects the customer to pay within the Show more…
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Q.1.2 The initial measurement of the right-of-use asset Q.1.3 The amortisation table for the period of the lease. Use the following format: Year Opening balance Rands Interest Rands Payment Rands Closing balance Rands Q.1.4 Prepare the journal entries relating to the asset from inception on 1 May 2022 up to and including the year-end date of 30 April2023. Q.1.5 A lessee may choose not to apply the requirements of IFRS16 to two types of leases. (6) Name and briefly describe each of these two types of leases. Q.1.6 For Part B, prepare the equalisation schedule for the five years in accordance with IFRS16 Leases. For Part A and Part B All answers must comply with the requirements of International Financial Reporting Standards (IFRS). All calculations must be shown as marks will be allocated. Round all amounts to the nearest rand. Journal narrations are not required.
Breanna O.
Q.1.3 The amortisation table for the period of the lease. Use the following format: Year Opening Balance Interest Rands Payment Rands Closing balance Rands Q.1.4 Prepare the journal entries relating to the asset from inception on 1 May 2022 up to and including the year-end date of 30 April2023. Q.1.5 A lessee may choose not to apply the requirements of IFRS16 to two types of leases. Name and briefly describe each of these two types of leases. Q.1.6 For Part B, prepare the equalisation schedule for the five years in accordance with IFRS16 Leases. For Part A and Part B All answers must comply with the requirements of International Financial Reporting Standards (IFRS). All calculations must be shown as marks will be allocated. Round all amounts to the nearest rand. Journal narrations are not required.
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