Instructions: All answers must be typed in and all workings must be shown.

QUESTION ONE Classic (Pty) Limited signed a contract with Design Time Renovators (the customer) on the 1 June 2020. The terms of the contract included the following: Classic (Pty) Ltd would supply and install a Victorian grand tub on the 1 July 2020 after which it would be required to supply and install an extractor fan in the bathroom The customer promised consideration of R25 000 payable by the 30th of September at the latest after both the bathtub and extractor fan are installed. The contract is cancellable in the event of non-performance The stand-alone selling prices for the supplied and fitted products are as follows: - Bathtub R20 000 - Extractor R5 000 Classic (Pty) Ltd supply and install the bathtub on the 1st of July as agreed and the extractor on the 5th of August. Control over the bathtub and extractor passes to Design Time Renovators on this day. Amount owing by Design Time Renovators is paid over on the 25 September 2020. Required 1. Prepare the journal entries for the year ended 31st December 2020 in respect of the above transactions in the books of Classic (Pty) Ltd. 2. What five criteria must be met to ensure a contract exists? 3. What is a wholly unperformed contract? QUESTION ONE Classic (Pty) Limited signed a contract with Design Time Renovators (the customer) on the 1 June 2020. The terms of the contract included the following: Classic (Pty) Ltd would supply and install a Victorian grand tub on the 1 July 2020 after which it would be required to supply and install an extractor fan in the bathroom The customer promised consideration of R25 000 payable by the 30th of September at the latest after both the bathtub and extractor fan are installed. The contract is cancellable in the event of non-performance The stand-alone selling prices for the supplied and fitted products are as follows: - Bathtub R20 000 - Extractor R5 000 Classic (Pty) Ltd supply and install the bathtub on the 1st of July as agreed and the extractor on the 5th of August. Control over the bathtub and extractor passes to Design Time Renovators on this day. Amount owing by Design Time Renovators is paid over on the 25 September 2020. Required 1. Prepare the journal entries for the year ended 31st December 2020 in respect of the above transactions in the books of Classic (Pty) Ltd. 2. What five criteria must be met to ensure a contract exists? 3. What is a wholly unperformed contract