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a. On 1 April 2019, MIB enters into a contract to design, manufacture and sell a customised machine to a customer for a consideration
a. On 1 April 2019, MIB enters into a contract to design, manufacture and sell a customised machine to a customer for a consideration of RM 5 million. The customer pays a non-refundable deposit of RM 1 million. The balance is payable only on delivery of the machine (expected to be 1 April 2020). MIB determines that the designing and manufacturing promises are bundled as a single performance obligation. Because MIB has no enforceable right for payment, the performance obligation is satisfied only at the date when the machine is delivered and installed. At 31 December 2019, the costs incurred to date amount to RM 1.8 million. Further costs to complete the contract are estimated at RM 1.1 million. Required: Prepare journal entries in the books of MIB from the date customer entered into the contract until the delivery date of the said machine.
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