A company sells goods to a customer for 12,500. The contract stipulates that the customer will pay
Question:
A company sells goods to a customer for £12,500. The contract stipulates that the customer will pay £2,500 when the goods are delivered (and the customer obtains control of them) and will then pay a further £10,000 three years after delivery. Assuming an effective interest rate of 8% per annum, calculate the amount of revenue which should be recognised at the delivery date.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 69% (13 reviews)
Sale of goods Revenue is recognised when all the following conditions hav...View the full answer
Answered By
MUHAMMED SHARITH
I graduated from University of Calicut with Bachelor of Commerce. I am confident of teaching you with my practical knowledge. Besides taking private lessons, I help small firms in maintaining book keeping and have helped business owners to learn the basics of accounting. I love teaching students who are passionate to make or build a career in chartered accountancy or want to understand accountancy from the beginning. After learning From me students found accounting is not boring but a fun subject and that's what has made me choose tutoring as career.
0.00
0 Reviews
10+ Question Solved
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Question Posted:
Students also viewed these Business questions
-
Manual Company sells goods to Nolan Company during 2019. It offers Nolan the following rebates based on total sales to Nolan. If total sales to Nolan are 10,000 units, it will grant a rebate of 2%....
-
Manual Company sells goods to Nolan Company during 2017. It offers Nolan the following rebates based on total sales to Nolan. If total sales to Nolan are 10,000 units, it will grant a rebate of 2%....
-
A company is contracted to build an asset for a customer. The contract price is 5m but the contract stipulates that the company will receive an incentive payment of a further 1m if the asset is...
-
You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: What is the Sharpe ratio, Treynor ratio, and Jensens alpha for eachportfolio?...
-
Draw the structures of the following DNA-derived dinucleotides: a. A--T b. G--T c. C--A
-
Normally, the shorter the runway, the smaller the load the aircraft can carry. T F
-
Which is the correct IIA definition of internal auditing? a. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organizations...
-
Lang Enterprises is interested in measuring its overall cost of capital. Current investigation has gathered the following data. The firm is in the 40% tax bracket. Debt. The firm can raise an...
-
Current Attempt in Progress Wildhorse Company has the following merchandise account balances at its September 30 year end: Cost of goods told Freight out Merchandise inventory Sataries expense...
-
In one year, one dollar ($1) could be exchanged for one euro and twenty cents (1.20). a. Derive a formula to exchange dollars into euros. Let d be the number of dollars. Let e be the number of euros....
-
Triangle, a public listed company, is in the process of preparing its draft financial statements for the year to 31 March 2018. The following matters have been brought to your attention: (i) On 1...
-
A customer buys three DVDs from a mail order company. These DVDs could have been bought separately and are regarded as distinct. The prices normally charged for the DVDs (if bought separately) are...
-
Fill in the blanks with an appropriate word, phrase, or symbol(s). A list containing the payment number, payment on interest, payment on principal, and the balance of the loan is called a(n)...
-
Let X be a continuous random variable with the following PDF Find the MGF of X, M X (s). fx(x) = +) == 12e-1|2|1 e-A/).
-
The number of hours spent studying per day by a sample of 28 students In Exercises 2326, use technology to draw a box-and-whisker plot that represents the data set. 2 8 7 2 261 82 35 37 25 20 73 83...
-
The English statistician Karl Pearson (1857-1936) introduced a formula for the skewness of a distribution. P = 3 ( x median ) s Pearson's index of skewness Most distributions have an index of...
-
You are to specify an orifice meter for measuring the flow rate of a $35^{\circ} \mathrm{API}$ distillate $(\mathrm{SG}=0.85$ ) flowing in a $2 \mathrm{in}$. sch 160 pipe at $70^{\circ} \mathrm{F}$....
-
Let $\theta$ and $\phi$ be the polar coordinates. Introduce the complex numbers $z$ and $\bar{z}$, where $$\begin{equation*} z=e^{i \phi} \tan (\theta / 2) \equiv \xi+i \eta \tag{5.393}...
-
Interview someone whom you know or contact a company and learn some of the details behind a product that interests you. Prepare a technical report of at least 250 words of the product, the company,...
-
During the year land was revalued and the surplus reported as Revaluation surplus; and an asset costing 80,000, written down to 38,000, was sold for 40,000. Identify the cost of any non-current...
-
List the criteria which might be used to distinguish employment from self-employment.
-
An interest in possession trust with two life tenants has the following income in tax year 2021-22: Property expenses incurred in the year were 2,220 and general administration expenses amounted to...
-
Bernice (who is not a Scottish taxpayer) has the following income in 2021-22: She makes a qualifying EIS investment of 20,000 in August 2021. Compute her income tax liability for 2021-22, assuming...
-
Practical Corporation is liquidated, with Neha receiving property having an adjusted basis of $60,000 and an FMV of $100,000. The property is subject to a $75,000 mortgage, which Neha assumes. Neha's...
-
6. Last year Mason Inc had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $195,000 and its net income was $10,549. The CFO believes that the company could have...
-
Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data,...
Study smarter with the SolutionInn App