Question 3: Accounting for revenue 1. Briefly explain the five steps of the revenue recognition model. 2. Hamilton Limited is a company that manufactures soft toys in New Zealand. The following transactions have been extracted from the records of Hamilton Limited for the year ended 31 March 2019. a) Hamilton Limited receives an order from Warehouse Limited for $133,000 of soft toys on 15th March 2019. Warehouse Limited pays a deposit of 10% with the order and the accountant of Hamilton Limited records the deposit as sales. However, at the balance sheet date, Hamilton Limited had not dispatched the goods. b) Hamilton Limited sells a machinery which is no longer required for its production of toys for $20,000 in February 2019. c) Hamilton Limited sells soft toys to a long-term customer for $40,000 on 1 March 2019 and will be paid in two years' time. Cost of capital of Hamilton Limited is 10%. Required: For each of the above transactions, comment on the revenue recognition and measurement implications according to NZ IFRS 15, Revenue from Contracts with Customers. Your answer should include following: 1. Apply the five steps for revenue recognition. 2. Determine the amount of revenue to be recognised for the year ended 31 December 2019 with justification. 3. Record the journal entries to record the correct revenue for the accounting period ending 31 December 2019