On 1 October 2020, Maximus sold a machine to a customer for £200,000 (excluding value added tax), and the customer paid in full when the machine was delivered on that date. In addition to the machine, Maximus agreed to provide maintenance for four years ending on 30 September 2024. Maximus has allocated £182,000 of the transaction price to the machine and £18,000 to the maintenance agreement. How much revenue should Maximus recognise from this sale in its income statement for the year to 31 December 2020? Select one: £183,125 £182,000 £186,500 £200.000
On 1 October 2020, Maximus sold a machine to a customer for £200,000 (excluding value added tax), and the customer paid in full when the machine was delivered on that date. In addition to the machine, Maximus agreed to provide maintenance for four years ending on 30 September 2024. Maximus has allocated £182,000 of the transaction price to the machine and £18,000 to the maintenance agreement. How much revenue should Maximus recognise from this sale in its income statement for the year to 31 December 2020? Select one: £183,125 £182,000 £186,500 £200.000
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
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Transcribed Image Text:On 1 October 2020, Maximus sold a
machine to a customer for £200,000
(excluding value added tax), and the
customer paid in full when the machine
was delivered on that date. In addition to
the machine, Maximus agreed to provide
maintenance for four years ending on 30
September 2024. Maximus has allocated
£182,000 of the transaction price to the
machine and £18,000 to the maintenance
agreement. How much revenue should
Maximus recognise from this sale in its
income statement for the year to 31
December 2020?
Select one:
£183,125
£182,000
£186,500
£200,000
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