uilding high quality executive flats in city centres. On 1 March 20X6 it sells a plot of building land to Finance plc, an unconnected company, for £1.5m. Triangle Ltd retains rights of access and supervision over the plot, the right to build on this land until 28 February 20X8 and the right to buy the plot back again on that date for £1.9m. On 1 March 20X6 the plot is
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Triangle Ltd specialises in building high quality executive flats in city centres. On 1 March 20X6 it sells a plot of building land to Finance plc, an unconnected company, for £1.5m. Triangle Ltd retains rights of access and supervision over the plot, the right to build on this land until 28 February 20X8 and the right to buy the plot back again on that date for £1.9m. On 1 March 20X6 the plot is valued at £2.5m. Explain how this sale transaction would be dealt with in Triangle Ltd’s financial statements for the year ended 28 February 20X7.
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- 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?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…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 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. Assume Mr. Bong has the right access the intellectual property, the total revenue…
- Pelé Corp. owns a popular convenience store in Washington state. Messi Corp. is hoping to purchase the store from Pelé for $8,500,000. Messi has identified the land and building have a fair value of $7,000,000 while inventory has a fair value of $700,000. Because of the store’s popularity, excellent customer service, and customer loyalty, Messi is willing to pay $800,000 above the fair value of the assets acquired in the purchase. If Pelé Corp. decides it will not accept anything less than $8,500,000, which Messi Corp. agrees to pay, how is the excess $800,000 payment accounted for? Excess Contributed Capital Plant, & Equipment Property, Plant, & Equipment Accumulated Deprecitation Accumulated DeprecitationTromp Limited is an investment company that purchases buildings and holds them for a number of purposes, such as resale, leasing and its own use. On 1 January 2014, Tromp Limited purchased an old building, Tromp Towers, for R300 000. Conveyancer’s fees amounted to R 20 000. This building is situated in an isolated part of Durban (South Africa) and there is no development anywhere nearby. At the time of purchase, there had been no property transactions in this area for many years and the possibility of leasing the building to tenants was remote. During November 2014, development began of a new industrial park in the area. As a result, the building was able to be leased to tenants involved in the development of the industrial park. Due to the influx of people into the area, the directors decided to paint one side of the building with the corporate logo of Tromp Limited. This building has never had an air-conditioning system. After numerous complaints from tenants about not being…Tromp Limited is an investment company that purchases buildings and holds them for a number of purposes, such as resale, leasing and its own use. On 1 January 2014, Tromp Limited purchased an old building, Tromp Towers, for R300 000. Conveyancer’s fees amounted to R 20 000. This building is situated in an isolated part of Durban (South Africa) and there is no development anywhere nearby. At the time of purchase, there had been no property transactions in this area for many years and the possibility of leasing the building to tenants was remote. During November 2014, development began of a new industrial park in the area. As a result, the building was able to be leased to tenants involved in the development of the industrial park. Due to the influx of people into the area, the directors decided to paint one side of the building with the corporate logo of Tromp Limited. This building has never had an air-conditioning system. After numerous complaints from tenants about not being able…
- Finley Co. is looking for a new office location and sees a building with a fair value of $400,000. Finley also notices that much of the equipment in the existing building would be useful to its own operations. Finley estimates the fair value of the equipment to be $80,000. Finley offers to buy both the building and the equipment for $450,000, and the offer is accepted. Determine the amounts Finley should record in the separate accounts for building and equipment.Bowens Pty Ltd is a building materials supplier in Victoria. Bowens Pty Ltd has an annual turnover of $24 million, and works under the accrual method of accounting. Bowens Pty Ltd purchases a concrete mixer for $660 each from Builder’s Choice Pty Ltd, a company in Geelong with an annual turnover of around $21 million, and works under the accrual method of accounting. Bowens Pty Ltd plans to sell the concrete mixers at a 200% mark-up to its customers. In October last year, it purchased 110 concrete mixers but in December they discovered that 12 of the concrete mixers were faulty and subsequently returned these faulty concrete mixers to the manufacturer, obtaining a full refund. Assume both apply the accrual method of accounting. Required: With reference to relevant laws, discuss the GST consequences of this arrangement for both Bowens Pty Ltd and Builder’s Choice Pty Ltd. (10 marks, maximum 400 words).Fusilli plc operates a business building and selling high-tech specialised machinery that takestwo years to build. Delivery and legal title to the machinery passes to the customer onceconstruction is complete.On 1 October 2020 Fusilli entered a contract to sell one of its machines to Orzo for £955,000 withpayment on completion in two years. Alternatively, Orzo can pay £850,000 on signing thecontract. The difference in price is equivalent to a 6% borrowing rate. The customer decides topay up front, and pays £850,000 on 1 October 2020Fusilli has a 30 September 2021 year end.(i) Show the accounting entries (using either debits and credits or the expandedaccounting equation) for the year ended 30 September 2021