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Furniture Ltd runs a promotion selling furniture under the following conditions: NO IN Initial deposit of 20% of purchase price. Immediate delivery of furniture. Interest
Furniture Ltd runs a promotion selling furniture under the following conditions: NO IN Initial deposit of 20% of purchase price. Immediate delivery of furniture. Interest rate of 12.5% pa charged on the outstanding balance. Repayment of the balance (including the interest) over 24 equal monthly instalments. Furniture retains legal title to the furniture until the final monthly payment has been made. Required: Discuss how Furniture Ltd should recognise revenue and explain why. (4 marks)
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