What amount of provision should be provided in relation to guarantee?* a. 2,000,000b. 1,000,000c. No provision is to be recognized but a disclosure of Php2,000,000 is appropriated. No provision and no disclosure to be made Effortless Company provided the following information on Dec. 31, 2021:- Effortless has signed as guarantor for a Php2,000,000 loan by Power Bankto Haggardness, Inc., a principal supplier to Efforless Company. There is aremote likelihood that Effortless will have to make payment on behalf ofHaggardness.- Effortless is defending against a labor dispute and believes that there is50% chance it will lose in court. If the entity loses, management believesthat effects will fall somewhere in the range of Php1,500,000 and 2,500,000.

INTRODUCTION Provisions are funds set aside by a business to cover specific anticipated future…

Answered: t amount of provision should be…

t amount of provision should be provided in relation to guarantee?* a. 2,000,000 b. 1,000,000 c. No provision is to be recognized but a disclosure of Php2,000,000 is appropriat

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6MC

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One of Rose’s suppliers, Powder Bhd, had adverse publicity due to the issue of cleanliness of its factory. On 1 September 2019, Rose Bhd decided to terminate the contract with Powder Bhd. The contract will expire in 8 months time. According to the contract, the cost to fulfill the contract is RM160,000 per month. It is also stipulated in the contract that Powder Bhd can accept a compensation of RM1,400,000 if the contract is terminated more than 6 months before it expires. Required:For each of the events above, explain whether provisions should be recognised in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets.
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Is there any way you can help me do this problem? I'm getting my debit and credit wrong. "On March 1, 2021, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink’s, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60 per unit. Brink’s picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1. On March 1, 2021, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner…
Sugar has entered into a long-term contract to build an asset for a customer, Hewer. Sugar will satisfy the performance obligation over time and has measured the progress towards satisfying the performance obligation at 45% at the year end. The price of the contract is $8 million. Sugar has spent $4.5 million to date, but the estimated costs to complete are $5.5 million. To date, Hewer has paid Sugar $3 million. What is the net liability that should be recorded in Sugar’s statement of financial position?
On January 1, 2020, Gordon Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,000. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Gordon identifies two performance obligations and allocates $1,200 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $700; the shelves have a cost of $320. Instructions a. Prepare the journal entry on January 1, 2020, for Gordon. b. Prepare the journal entry on February 5, 2020, for Gordon when the wiring base is delivered to the customer. c. Prepare the journal entry on February 25, 2020, for Gordon when the shelving unit is delivered to the customer and Gordon receives full payment.
McElroy Inc., a marketing consulting firm, entered into the following three revenue contracts in March, 2021. 1. The contract with Customer A requries that McElroy Inc. provides 10 hours of consulting services at $300 per hour. 2. The contract with Customer B requires that McElroy, Inc. develops an electronic promotion of the customer's new product line. Payment for the services are equal to $6,000 plus 2% of the customer's sales over the one month promotion period. McElroy, Inc. estimates that there is a 30% chance of sales totaling $100,000, a 50% chance of sales totaling $150,000, and a 20% chance of sales totaling $200,000. 3. The contract with Customer C requires McElroy, Inc. to create a promotional mailing for its product for $8,000. McElroy Inc. will receive a bonus of $500 if the project is completed within 5 business days and a $250 bonus if the project is completed within 6 business days. Based on McElroy's estimate of the time to complete the project and status…