Question
On 27 January 2021, Johnson Engineering Ltd signed a contract to supply a new machine to Yummy Confectionary Ltd for $92,000 (including GST). This includes
On 27 January 2021, Johnson Engineering Ltd signed a contract to supply a new machine to Yummy Confectionary Ltd for $92,000 (including GST). This includes $75,000 for the machine (excluding GST), $2,000 for delivering and installing the machine (excluding GST) and $3,000 for servicing the machine in 6 months.
Johnson Engineering Ltd delivers and installs the machine on 12 February 2021. An invoice for $92,000 is also given to Yummy Confectionary Ltd on this day.
Yummy Confectionary Ltd transfers $92,000 to Johnson Engineering Ltd on 21 February 2021 via internet banking.
Johnson Engineering Ltd services the machine on 12 August 2021.
Required:
Prepare journal entries for invoicing of the contract on 12 February 2021 and the servicing of the machine on 12 August 2021.
Johnson Engineering Ltds General Journal:
| Date | Account Names | Debit | Credit |
| 12/2/2021 |
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| (To record the invoice for contract with Yummy Confectionary Ltd) |
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| 12/8/2021 |
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| (To record servicing of the machine supplied to Yummy Confectionary Ltd) |
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Value Based Management Context And Application
Authors: Glen Arnold, Matt Davies
1st Edition
0471899860, 978-0471899860
