The Pop Cap Company sells goods to a third party via an agent.  During 2020 Pop Cap supplies the agent with goods with a sales value of P200,000.  The agent charges a commission of 15%.  How much revenue should each of Pop Cap and the agent recognize in profit or loss for 2020?


2. While the wheat is still growing, the entity enters into a contract for the future sale of 120 tons of wheat at P550 per ton. Before the year-end, it harvests 50 tons of wheat at a time when the fair value less costs to sell of the wheat is 500 per ton. At the year-end this value had declined to 480 per ton.  The financial statements are drawn up before any of the wheat has been sold, and the value has by then recovered to 490 per ton.  
What is the value that must be used for the preparation of the financial statements?


3. On January 1, 2020, Threepeater Co. equipment costing P380,000 with accumulated depreciation of P160,000 on the date of sale.  Threepeater received as consideration for the sale, a P400,000 noninterest-bearing note, due January 1, 2023.  There was no established exchange price for the equipment and the note had no ready market.  The prevailing rate of interest for a note of this type at January 1, 2020 was 10% and 12% on December 31, 2020.  In Threepeater's 2020 income statement, how much should be included for interest income?

Answer rating: 100% (QA)

1 In this scenario Pop Cap should recognize the revenue for the goods supplied to the agent The sale... View the full answer