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- Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. Assume Mr. Bong has the right to use the intellectual property, the total revenue…Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. The following shall be accounted as part of the consigned inventory of the…Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. Case 1: Assume Mr. Bong has the right use the intellectual property, the…
- Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. Assume Mr. Bong has the right access the intellectual property, the total revenue…Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. Case 3: Assume Mr. Bong has the right access the intellectual property, the…7. Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. The following shall be accounted as part of the consigned inventory of the…
- AGI software inc entered into a $250,000 contract with mcdonald company to transfer a software license, perform the related installation service and provide a tech support for three-year period. AGI sells the license to the software, installation service, and tech support as a bundle of product for a lump-sum price. the installation service and tech support could be performed by other entities and there is a ready market for those services. the stand-alone prices for software, installation service, and tech support service were 160,000 20,000 and 30,000 per year (i.e., total of 90,000 for three years) respectively. The contract was finalized on march 1 2020. AGI delivered the software license on april 1 2020 when its title was transferred to mcdonald. AGI completed installation on may 15 2020 at which point the tech support service will begin covering a period of three years. Upon installation of software on may 15, mcdonald paid for the software, installation service, and one-year…Winnie Corporation purchases Joshua Company and, as part of the contract, will have to pay Joshua an additional $100,000 if the company achieves certain revenue goals for two years after the acquisition. How should Winnie account for this contingent payment?Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020 for P500,000. On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2% discount if paid within 30 days, 1% discount if paid after 30 days, or payabl e in full within ninetydays if not paid within the discount periods. However, the customer had the right to return this machine to Yellow Company if it was unable to resell the machine before the expiration of the ninety-day payment period, in which case the customer’s obligation to Yellow Company would be canceled. In the net sales for the year ended december 31,2020, what amount should be included for the sale of the machine? a. 750,000 b. 735,000 c. 742,500 d. 0
- Christina Co. has a factory equipment with a carrying amount of P700,000 and has a remaining useful life of 7 years. On January 1, 2020, Christina agreed to an exchange transaction with Kat & Inc. to transfer the equipment to the latter. The transfer satisfied the requirements of PFRS 15 to be a sale and Christina immediately leased it back for a lease term equal to the remaining life of the equipment. The sales price amounted to P500,000 while annual rental payable at the end of each year is P100,000 for an implicit rate of 10%. Selling price is equal to fair value. How much loss shall Christina recognize in relation to the sale and leaseback transaction? a. 681,578.63 b. 200,000 c. 194,736.75 d. 5,263.25Tran Technologies licenses its functional intellectual property to Lyon Industries. Terms of the arrangement require Lyon to pay Tran $590,000 on April 1, 2024, when Lyon first obtains access to Tran’s intellectual property, and then in the future to pay Tran a royalty of 5% of future sales of products that utilize that intellectual property. Tran anticipates receiving sales-based royalties of $1,090,000 during 2024 and $1,590,000 per year for the years 2025 to 2029. Assume Tran accounts for the Lyon license as a right of use, because Tran’s actions subsequent to April 1, 2024, will not affect the benefits that Lyon receives from access to Tran’s intellectual property. Required: Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access. Identify the specific nine-digit Codification citation (XXX-XX-XX-XX) for accounting for variable consideration arising from sales-based royalties on licenses of intellectual property,…On January 1, 2020, Tom Co (A seller-lessee) sells a building to MacCo (an unrelated buyerlessor) for cash of CU2,000,000. The fair value of the building at that time is CU1,800,000; the carrying amount immediately before the transaction is CU1,000,000. At the same time, TomCo enters into a contract with MacCo for the right to use the building for 18 years, with annual payments of CU120,000 payable at the end of each year. The interest rate implicit in the lease is 4.5%, which results in a present value of the annual payments of CU1,459,200. The transfer of the asset to MacCo has been assessed as meeting the definition of a sale under IFRS 15. Discuss the implication of the transactions and state the journal entries on January 1, 2020