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Simpson Inc. buys and sells machines that are used in businesses across Ontario. The company follow IFRS. - Simpson Inc. sells a machine to Bart Inc. on August 16th, 2023. The selling price for the machine is usually $50,400. - Simpson Inc. will also install the machine. The estimated fair value of installing the machine is $3,920. - Simpson Inc. will also provide maintenance for the machine for 2 years. The estimated fair value of maintenance is $1,680. - Simpson Inc. sold the machine, installation and maintenance to Bart Inc. for $52,000. The machine cost Simpson Inc. $22,000. The company uses the perpetual inventory system. - Simpson Inc. bills and delivers the machine on September 1st, 2023. - Simpson completes the installation of the machine on September 15th, 2023. The customer pays cash for the installation on September 15th. - The maintenance starts on October 1st, 2023. The customer pays cash for the 2 years of maintenance. On November 1st Bart Inc. informs Simpson Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be repaid in one year from now. Bart Inc. borrows fund at a rate of 8%. The company's year end is December 31st. i. Identify the performance obligations and calculate the revenue for each performance obligation (6 marks) Hint refer to chapter 6 allocating the transaction price to separate performance obligations. ii. Prepare the journal entries for 2023 and 2024. Hint remember to allocate the revenue among the different performance obligations and then use this information when you prepare the journal entries. In other use the answers you calculated in part i. In your answer do not use the discount on notes account. (16 marks) Hint this part uses concepts from chapter 6 and chapter 7 non-interest bearing notes. i. \begin{tabular}{|l|l|l|l|l|} \hline \begin{tabular}{l} List the Performance \\ Obligations \end{tabular} & Fair value & Percentage & \begin{tabular}{l} Transaction/ \\ Selling Price \end{tabular} & \begin{tabular}{l} Revenue for \\ each \\ performance \\ obligation \end{tabular} \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline Total & & & & \\ \hline \end{tabular} ii. (15 marks) Simpson Inc. buys and sells machines that are used in businesses across Ontario. The company follow IFRS. - Simpson Inc. sells a machine to Bart Inc. on August 16th, 2023. The selling price for the machine is usually $50,400. - Simpson Inc. will also install the machine. The estimated fair value of installing the machine is $3,920. - Simpson Inc. will also provide maintenance for the machine for 2 years. The estimated fair value of maintenance is $1,680. - Simpson Inc. sold the machine, installation and maintenance to Bart Inc. for $52,000. The machine cost Simpson Inc. $22,000. The company uses the perpetual inventory system. - Simpson Inc. bills and delivers the machine on September 1st, 2023. - Simpson completes the installation of the machine on September 15th, 2023. The customer pays cash for the installation on September 15th. - The maintenance starts on October 1st, 2023. The customer pays cash for the 2 years of maintenance. On November 1st Bart Inc. informs Simpson Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be repaid in one year from now. Bart Inc. borrows fund at a rate of 8%. The company's year end is December 31st. i. Identify the performance obligations and calculate the revenue for each performance obligation (6 marks) Hint refer to chapter 6 allocating the transaction price to separate performance obligations. ii. Prepare the journal entries for 2023 and 2024. Hint remember to allocate the revenue among the different performance obligations and then use this information when you prepare the journal entries. In other use the answers you calculated in part i. In your answer do not use the discount on notes account. (16 marks) Hint this part uses concepts from chapter 6 and chapter 7 non-interest bearing notes. i. \begin{tabular}{|l|l|l|l|l|} \hline \begin{tabular}{l} List the Performance \\ Obligations \end{tabular} & Fair value & Percentage & \begin{tabular}{l} Transaction/ \\ Selling Price \end{tabular} & \begin{tabular}{l} Revenue for \\ each \\ performance \\ obligation \end{tabular} \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline Total & & & & \\ \hline \end{tabular} ii. (15 marks)