Question
Assume that on February 20, 2014 (the last day of Tesco 's half-year reporting period ending on February 21, 2014), Tesco received 200 million in
Assume that on February 20, 2014 (the last day of Tesco 's half-year reporting period ending on February 21, 2014), Tesco received 200 million in prepayments from Unilever under the expectation that Tesco will purchase a certain volume of products over the next three years. Further, assume that during the following six months Tesco purchased 500 million - earning50 million of the prepayment - in products from Unilever, out of which it sold 50 % for 250 million. How would Tesco account for these transactions for its fiscal report ending on February 21 and on August 2, 3 2014?
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