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QUESTION 4) (20 pts) On December 31, 2020, Company A sold 100 t-shirts to Company B for 1,000 KWD. Company A delivered all products in
QUESTION 4) (20 pts) On December 31, 2020, Company A sold 100 t-shirts to Company B for 1,000 KWD. Company A delivered all products in the same day. Total cost of t-shirt is 600 KWD. Company B paid half of the amount in the same day and promised to pay the remaining next week. Company A trusts Company B. Comment on the transaction using the below format for your answers: a) Tell whether revenue is earned or not for the two factors: (10 pts, 5 pts each) Is Revenue earned for Company A? Yes or No. Why? Is Revenue realized or realizable for Company A? Yes or No. Why? b) Is there any effect on the 2000-year end Income Statement of Company A? Yes or No. How much is the effect? If there is no effect tell KWD zero) (5 pts) c) Is there any effect on the 2000-year end Statement of Cash Flows of Company A? Yes or No. How much is the effect? (If there is no effect tell KWD zero) (5 pts)
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