Question 6

1. On 30 June 2019, Entity A received an order from a new customer, Entity B, for products with a sales value of $900,000. Entity B enclosed a cheque as this order deposit of $90,000.

   However, Entity A had not completed credit checks on Entity B and had not despatched any goods to Entity B.

   On 7 July 2019, Entity A received the credit report from an international credit reporting agency. The report confirmed that Entity B was financially healthy. On 9 July 2019, Entity A delivered the goods to Entity B and provided a 3-month credit term to Entity B for any unpaid amount.

   The cost of this order was $650,000.

   REQUIRED:

   According to the relevant accounting standards, provide the journal entries on 30 June 2019.

   ACCOUNT NAMES FOR INPUT:

   | Road roller | Plant | Machine | Motor van | Land | Building | Inventory | Intangible assets |

   | Bank | Payable | Receivable | Other income | Other expense | Interest expense | Interest revenue |

   | Depreciation | Accum. depreciation | Impairment loss | Reversal of impairment loss | Goodwill |

   | Loss on disposal | Gain on disposal | Restoration liability | Revaluation surplus | Revaluation deficit |

   | Asset for product to be returned | Commission expense | Commission revenue | Revenue |

   | Cost of sales | Refund liability | Contract asset | Contract liability | Retained earnings | No entry |

   ANSWERS:

   Journal Entries:

   Date	Account Name	Debit ($)	Credit ($)	Hints For Sequence
   30-Jun-19	Blank 1	Blank 2
   	Blank 3	Blank 4		Judge Dr/Cr side
   	Blank 5	Blank 6		Judge Dr/Cr side
   	Blank 7	Blank 8		Judge Dr/Cr side
   7-Jul-19	Blank 9	Blank 10
   	Blank 11		Blank 12
   9-Jul-19	Blank 13	Blank 14
   	Blank 15	Blank 16		Judge Dr/Cr side
   	Blank 17	Blank 18		Judge Dr/Cr side
   	Blank 19	Blank 20		Judge Dr/Cr side
   	Blank 21	Blank 22		Judge Dr/Cr side