Question
In: Accounting
Dragon’s Fire Pty Ltd enters into three contracts in the same week with Red Hot Equipment...
Dragon’s Fire Pty Ltd enters into three contracts in the same week with Red Hot Equipment Pty Ltd who have agreed to pay the total of $726 000 (GST inclusive). Red Hot Equipment Pty Ltd pay the total in full on 7 August 2021. The details for the three contracts are as follows:
| Date of Contract | Description | Contract Price (GST Exc) | Stand Alone Selling Price (GST Exc) |
| 1/1/2021 | Construction of Outdoor wood heaters | $600,000 | $320,000 |
| 3/1/2021 | Renovation of existing wood heaters owned by the client | $40,000 | $140,000 |
| 5/1/2021 | Construction of new model of wood heater to be used inside | $40,000 | $200,000 |
Required:
Apply the five-step process for revenue recognition in regards to the contract with Red Hot Equipment Pty Ltd. Discuss how Dragon’s Fire shall recognise the revenue from the contract. Please list each of the five steps and show any calculations.
Solutions
Expert Solution
Hi there !!
Let me help you with this question relating to this Accounting standard based on Revenue Recognition :
I have explained the concept below in most concise way to help u understand it quickly.
Please go through below notes which will help u solve question accordingly :
I hope the solution is clear to you now....do let me know if you have any other issues...
All the best !!
Happy Studying :)
ekkarill92 answered 2 years agoRelated Solutions
You have a hot gas that enters a pipe at 140c and ethylene entering the same...
You have a hot gas that enters a pipe at 140c and ethylene
entering the same pipe at 30 C to make an ethylene mixture.
I need to figure out equations for U (overall heat transfer
coefficient) as a function of mass flowrate M and the exit temp of
the ethylene as a function of mass flowrate.
How do you go about designing these equations?
Lisa Limited Pty Ltd purchases a new equipment on 1 January 2015. The equipment cost was...
Lisa Limited Pty Ltd
purchases a new equipment on 1 January 2015. The equipment cost was
$200,000 and useful life was 10 years with zero residual value. On
January 1, 2019, the company decides that the equipment will last
total 20 years rather than 10 years. The company uses straight-line
method of depreciation and the fiscal year end is 31 December.
Required:
Calculate depreciate for 2015, 2016, 2017 and 2018.
How will the equipment be reported on the balance sheet...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment.
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment. At the Beginning of the year 2020, H&S expanded its retail business by adding over 50 shops in order to meet...
Rose Ltd enters into a lease of office equipment for five years. The total value of...
Rose Ltd enters into a lease of office equipment for five years.
The total value of the equipment when new is $5000. The lease
payments are payable on 30 June each year. The first lease payment
of $1 500 is payable at commencement of the lease on 30 June 2019.
The remaining lease payments are $1 400 in years 2 and 3 and $1 500
in years 4 and 5. In addition to the payments, the lessor provides
a lease...
Heavy Duty Gym Equipment Pty Ltd sells gym equipment and personal trainer lessons. On 1 June...
Heavy Duty Gym Equipment Pty Ltd sells gym equipment and
personal trainer lessons. On 1 June 2020, Heavy Duty Gym Equipment
Pty Ltd signs an agreement with Burwood Fitness Club to provide 2
personal training sessions for 10 weeks and 5 items of gym
equipment. The contract price amounted to $44,000 (GST inclusive),
on credit terms n/30 for the equipment and the personal training
lessons. This amount also includes one free service for the
equipment to be performed twelve months...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment. At the Beginning...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of
Personal Protective Equipment. At the Beginning of the year 2020,
H&S expanded its retail business by adding over 50 shops in
order to meet the demand for protective gear. The following
information has been extracted from the comparative financial
statements included in the company's 2019 annual report (all
amounts are in thousands of Rands):
Dec. 31, 2019
Dec. 31, 2018
Total liabilities
R26 000
R18 000
Total shareholders' equity
34...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment. At the Beginning...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of
Personal Protective Equipment. At the Beginning of the year 2020,
H&S expanded its retail business by adding over 50 shops in
order to meet the demand for protective gear. The following
information has been extracted from the comparative financial
statements included in the company's 2019 annual report (all
amounts are in thousands of Rands):
Dec. 31, 2019
Dec. 31, 2018
Total liabilities
R26 000
R18 000
Total shareholders' equity
34...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment. At the Beginning...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of
Personal Protective Equipment. At the Beginning of the year 2020,
H&S expanded its retail business by adding over 50 shops in
order to meet the demand for protective gear. The following
information has been extracted from the comparative financial
statements included in the company's 2019 annual report (all
amounts are in thousands of Rands):
Dec. 31, 2019
Dec. 31, 2018
Total liabilities
R26 000
R18 000
Total shareholders' equity
34...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment. At the Beginning...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler
of Personal Protective Equipment. At the Beginning of the year
2020, H&S expanded its retail business by adding over 50 shops
in order to meet the demand for protective gear. The following
information has been extracted from the comparative financial
statements included in the company's 2019 annual report (all
amounts are in thousands of Rands):
Dec. 31, 2019
Dec. 31, 2018
Total liabilities
R26 000
R18 000
Total shareholders' equity
34...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler of Personal Protective Equipment. At the Beginning...
HEALTH and SAFETY (PTY) LTD (H&S) is a wholesaler
of Personal Protective Equipment. At the Beginning of the year
2020, H&S expanded its retail business by adding over 50 shops
in order to meet the demand for protective gear. The following
information has been extracted from the comparative financial
statements included in the company's 2019 annual report (all
amounts are in thousands of Rands):
Dec. 31, 2019
Dec. 31, 2018
Total liabilities
R26 000
R18 000
Total shareholders' equity
34...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- I would like to integrate a bubble sort into this binary search in c ++ Thank...
- Answer the bottom in 1-2 paragraphs Classical conditioning is a learned behavior where previously neutral response...
- identify one intrapersonal relationship and evaluate its component.
- Using Python in vs code: The distribution of letters in a document has a distinctive and...
- Why is De Beers exploring the diamond reselling market? How does the creation of IIDV affect...
- programming in Python The body mass index (BMI) is calculated as a person’s weight (in lb)...
- 1. Show the steps in merging A and B into C where A= 8, 12, 19,...
ADVERTISEMENT