Business Its Legal Ethical & Global Environment
10th Edition
ISBN: 9781305224414
Author: JENNINGS
Publisher: Cengage
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NGD Corp, a publically traded company, is a manufacturer of electrical supplies. Its main headquarters is based in Salt Lake City, Utah, and the company has been operating since 1977. The company sells its products to the retail market on a world-wide basis. Its major clientele is Home Depot and Lowes and has captured about 10 percent of the world market of light bulbs sales. Their financial statements presented below, for the Year Ending December 31, 2019, have been prepared using US GAAP. The controller would like to begin to see the effects of using IFRS on the Income Statement and Balance Sheet and you has been assigned to help with this task. The company would like to adapt IFRS by as early as next year as it is considering a new stock issue in the London Stock Exchange, which requires IFRS compliance.
ADDITIONAL INFORMATION 1. NGD Corp. uses the LIFO method to account for its inventory. The LIFO reserve was $30,000 at the beginning of the year and $40,000 as of year-end.
2.…
Erika Company operates a customer loyalty program. The entity grants loyalty points for goods purchased.
The loyalty points can be used by the customers in exchange for goods of the entity. The points have no expiry date.
During 2020, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeemed.
The fair value of the award credits granted is reliably measured at P2,000,000.
In 2020, the entity sold goods to customers for a total consideration of P9,000,000 based on stand-alone selling price.
The award credits redeemed and the total award credits expected to be redeemed each year are as follows:
Redeemed Expected to be
Redeemed
2020 15,000 80%
2021 7,950 85%
2022 2,550 85%
2023 15,000 90%
Required:
Prepare journal entries from 2020 to 2023.
In order to finance working capital of ABC( PVT) Ltd., Islamic bank signed Istisna’a order with manufacturer of Tractors; ABC(PVT) Ltd. to manufacture 100 tractors for Islamic bank , ABC also agreed to sell these tractors after manufacturing as an agent ofthe Islamic bank using is tail distribution network. However, when ABC (PVT) Ltd delivered 100 tractors, the company refused towork as an agent to sell them in market on the grounds that Istisna’a and agency were parallel and independent contracts.As Islamic banker, do you think Islamic bank has option to blacklist and sue ABC (PVT) Ltd, please argue accordance with istisna?
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