In: Accounting
Entity A is a manufacturer of consumer goods. On 1 January 2020, Entity A entered into a one-year contract to sell goods to a large global chain of retail stores. The customer committed to buy at least $90,000,000 of products in January. The contract required Entity A to make a non-refundable payment of $200,000 to the customer at the inception of the contract. The $200,000 payment is to compensate the customer for the changes required to its shelving to accommodate Entity A's products. Entity A duly paid this $200,000 to the customer on 3 January 2020.
Entity A transferred goods with an invoice price of $98,000,000 to the customer on 31 January 2020. The customer agreed to settle the outstanding amount by two payments, i.e. 40% and 60% of the outstanding amount on 18 February 2020 and 31 March 2020 respectively.
REQUIRED:
Provide journal entries for Entity A from 1 January 2020 to 31 March 2020 in accordance with relevant accounting standards.
ACCOUNT NAMES FOR INPUT:
| Plant | Machine | Motor van | Equipment | Land | Building | Inventory | Intangible assets |
| Bank | Payable | Receivable | Other income | Other expense | Interest expense | Interest revenue |
| Depreciation | Accum. depreciation | Impairment loss | Reversal of impairment loss | Goodwill |
| Loss on disposal | Gain on disposal | Restoration liability | Revaluation surplus | Revaluation deficit |
| Asset for product to be returned | Commission expense | Commission revenue | Revenue |
| Cost of sales | Refund liability | Contract asset | Contract liability | Retained earnings | No entry |
ANSWERS:
Journal Entries:
Date | Account Name | Debit ($) | Credit ($) | Hints For Sequence |
1-Jan-20 | Blank 1 | Blank 2 | ||
Blank 3 | Blank 4 | |||
3-Jan-20 | Blank 5 | Blank 6 | ||
Blank 7 | Blank 8 | |||
31-Jan-20 | Blank 9 | Blank 10 | ||
Blank 11 | Blank 12 | P/L item. Judge Dr/Cr side | ||
Blank 13 | Blank 14 | Judge Dr/Cr side | ||
Blank 15 | Blank 16 | Judge Dr/Cr side | ||
18-Feb-20 | Blank 17 | Blank 18 | ||
Blank 19 | Blank 20 | |||
31-Mar-20 | Blank 21 | Blank 22 | ||
Blank 23 | Blank 24 |
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