Question
Pharoah Company sells goods that cost $320,000 to Flounder Company for $405,000 on January 2, 2020. The sales price includes an installation fee, which is
Pharoah Company sells goods that cost $320,000 to Flounder Company for $405,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $33,200. The fair value of the goods is $381,800. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Flounder Company pays Pharoah $262,000 upon delivery of the goods and the balance at the completion of the installation.
1) Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Pharoah. Assume IFRS is followed.
| Performance Obligation |
|
| ||||
| Deliver goods | ||||||
| Installation |
2) Prepare the journal entries for Pharoah on January 2, March 1, and June 18, 2020
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Comprehensive Audits Of Radiotherapy Practices A Tool For Quality Improvement, Quality Assurance Team For Radiation Oncology
Authors: International Atomic Energy Agency
1st Edition
9201037074, 978-9201037077
