Mr. Sandro, a real estate developer, enters a contract with Arnold Reyes to sell a building for P1 million. Arnold intends to open a warehouse in the building for his sticky rice products. The building is in an area where new buildings face high levels of competition and Arnold has little experience in the rice treading industry. As a result, the contract price of P 100,000,000 is not probable as to its collectability. From the details above, can we account for the contract as a contract revenue from the customer?

Mr. Sandro, a real estate developer, enters a contract with Arnold Reyes to sell a building for P1 million. Arnold intends to open a warehouse in the building for his sticky rice products. The building is in an area where new buildings face high levels of competition and Arnold has little experience in the rice treading industry. As a result, the contract price of P 100,000,000 is not probable as to its collectability. From the details above, can we account for the contract as a contract revenue from the customer?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 56P

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