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 prepayments
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 purchases 500 million earning 50 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 reports ending on february 21 and on august 23, 2014?
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