Venus Limited, a company that prepares its financial statements to 31 December each year, is involved in the manufacture and distribution of greenhouses. A number of issues have still to be resolved before the financial statements for the year ended 31 December 2021 can be finalised: Issue 1: On 1 January 2021, Venus Limited began selling a wooden greenhouse with a three-year warranty against wood decay at no extra cost to the customer for 6600 . During 2021, 18,000 of these wooden greenhouses were sold evenly throughout the year. These have been included in revenue for the year ended 31 December 2021 at 600 each. One of Venus Limited's competitors sells an identical wooden greenhouse without a warranty for E550, while an unrelated insurer offers an equivalent warranty for 275 . The experience of other manufacturers suggests that wooden greenhocises have an equal probability of suffering from wood decay in each of the three years covered by the warranty. Issue 2 : Venus Limited commenced construction of a new manufacturing facility on 1 January 2021 at a total cost of f3,000,000. In order to finance the cost of the construction, the company borrowed f4,000,000 on I January 2021 at an interest rate of 14% per annum. During February 2021, no construction took place due to bad weather. Construction recommenced on 1 March 2021 and was completed on 31 October 2021. The new manufacturing facility was available for use on I January 2022. All loan interest has been expensed to the statement of profit or loss and other comprehensive income as incurred in 2021. The company intends to repay the loan on 30 June 2022. B Issue 3: Venus Limited acquired f180,000 of finished goods inventories on consignment from Earth Limited during December 2021. While the goods remain in Venus Limited's inventory at 31 December 2021, they are not recorded in the company's financial statements for the year ended 31 December 2021. The contract with Earth Limited states that Venus Limited has the right to sell the inventories direct to the public or to transfer them at cost to another retailer. Earth Limited cannot force Venus Limited to return the goods or transfer them to another retailer. Issue 4: Venus Limited received and accepted an order for aluminium greenhouses from a regular customer, Mars Limited, on 23 December 2021 for an agreed price of 200,000. However, due to the Christmas holidays, these aluminium greenhouses were not despatched until 3 January 2022. Mars Limited received the aluminium greenhouses on the same day and paid for them on 23 January 2022. The aluminium greenhouses are included in Venus Limited's inventory at 31 December 2021 at their cost price of f160,000. Based upon the information provided, how much revenue should Venus Limited recognise in its financial statements for the year ended 31 December 2021 in relation to the order from Mars Limited? Enil 200,000 180,000 160,000 Issue 2: Based upon the information provided, what is the cost of the interest that should be capitalised in the financial statements of Venus Limited for the year ended 31 December 2021? 400,000 300,000 420,000 315,000
