Question
Question 6 On 30 June 2019, Entity A received an order from a new customer, Entity B, for products with a sales value of $900,000.
Question 6
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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
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