Question 2 ( 20 Marks)

Jive Ltd publishes magazines. On 01 April 2021, it receives N$25 000 from a subscriber for a 12 month subscription period, from 01 April 2021 to 31 March 2022. The financial year end of Jive Ltd is 31 December YOU ARE REQUIRED TO:

a) Prepare the journal entry to be recognized on receipt of the cash from the subscriber on 01 April 2021. (2 marks)

b) Calculate the amount of income to be recognized in respect of the subscription for the year ended 31 December 2021 and explain why this is recognized as income. Justify your answer using the Conceptual Framework. (5 marks)

c) Calculate the amount of the asset or liability to be recognized on the statement of financial position in relation to the subscription at 31 December 2021 and explain why this is recognized as an asset or liability. Justify your answer using the Conceptual Framework. (6 marks)

d) State the recognition criteria of the Conceptual Framework. (4 marks)

e) Describe measurement in terms of the Conceptual Framework and state the measurement bases. (3 marks