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26. On 1 April 2020 Chan Ltd sells an item of plant to a finance company and leases it back for a period of five years, at the end of which the fair value of the plant is estimated to be nil. Which of the following represents the correct accounting treatment for this transaction?* IS (2 Points) Revalue the plant to the value of the sale proceeds, treat the sale proceeds as a financial liability Ignore the disposal, treat the sale proceeds as a financial liability Spread the profit on disposal over five years, capitalise the new lease at the present value of the lease payments Recognise the profit on disposal in the current year, capitalise the new lease at the present value of the lease payments 27. IFRS 16 Leases permits a simplified treatment for certain assets. For which of the following leases would the simplified treatment not be permitted? (2 points) Telephone with cost of $500, leased for 24 months Motor car with original cost of $10,000, current fair value of $500, leased for 24 months Desk with cost of $750, leased for 24 months Motor car with cost of $10,000, leased for 9 months 28. Which of the following statements is correct? Statement 1: If the revaluation model is used for property, plant and equipment, revaluations must subsequently be made with sufficient regularity to ensure that the carrying amount does not differ materially from the fair value at each reporting date. Statement 2: When an item of property, plant and equipment is revalued, there is no requirement that the entire class of assets to which the item belongs must be revalued. * (2 Points) Both statements are correct Neither statement is correct Statement 2 only is correct Statement 1 only is correct 29. Locke sells machines, and also offers installation and technical support services. The individual selling prices of each product are shown below. Sale price of goods $75 Installation $25 A year's service $50 Company X bought a machine on 1 May 2018 and was charged a reduced price of $100. Locke only offers discounts when customers purchase a package of products together. According to IFRS 15 Revenue from Contracts with Customers, how much should be recorded in revenue for the year ended 31 December 2019? Answer should be rounded to the nearest $. * (2 points) $67 $89 $100 $125 30. Which ONE of the following is NOT one of the five steps for recognising revenue according to IFRS 15 Revenue from Contracts with Customers? (2 Points) Recognise revenue when (or as) the entity satisfies a performance obligation Determine the transaction price Identify the contract Option 2 Ascertain whether control over the goods has passed or not
