Income

Below you will find information about trading in three different companies.

The following needs to be resolved:

Show which entries need to be made in the accounts of the company in question in the year 2020 due to the transactions listed below. Be sure to show all dates, names of relevant accounting keys and all figures in whole dollars. Entries may be displayed as T-invoices instead of standard presentation if you prefer.

The company UDA ehf. is an agent and distributor for well-known brands in technical products. On November 1, the company signed an agreement for the delivery of 250 units of product A to the company Tknisalan ehf. According to the agreement, UDA must deliver the product in two deliveries and the buyer must pay for the product in cash each time. The following information is available about product A: list price ISK 180,000. per unit (cost price ISK 81,000 per unit). The buyer receives a 20% discount from the list price and has a 60-day right of return from the delivery of the product, provided that the product is in the original packaging. Based on the experience of recent years of similar transactions, the sales manager expects that 6% of the product will be returned and that the equipment returned can be sold at a profit. UDA delivered 100 units to Tkislan on 20 November and the rest on 10 December. Five devices were returned on December 25, and UDA Tknislan refunded the purchase price on the same day. The sales manager believes that it is appropriate to use the previously stated criteria.

The company VOT ehf. signed an agreement with ABC ehf. on July 1 for the delivery of a new production line and training of ABC employees. ABC can choose between having VOT set up a production line or take care of the installation itself, and ABC chooses to let VOT take care of the installation. According to the agreement, VOT should have completed the delivery and installation of the line on September 1, but the training of ABC employees will last for one year from the delivery of the line. The value of the agreement is ISK 450,000,000. and ABC shall pay a 10% confirmation fee upon signing the contract but the balance 60 days after delivery and installation of the line is completed. The standalone price of the equipment that forms the production line is ISK 450,000,000. (cost price 270,000,000 ISK), independent sale price of installation is 9,000,000 ISK. and the independent sale price of training is ISK 13,500,000. VOT completed the installation of the line on September 1, and the training of ABC employees began the same day.

OPM ehf. imports and sells machinery and equipment to contractors. On June 30, OPM signed an agreement with Capital fjrfestingar ehf. on the sale of three machines. According to the agreement, the sale price is ISK 75,000,000. and Capital shall pay the purchase price upon signing. One of the conditions of the agreement is that OPM buys these three machines on 1 July 2021 (one year after the sale) for ISK 84,000,000.