Cochrane Collett Cornish Ltd (CCC), is a reporting entity that manufactures and sells specialised machinery. The following transactions occurred during the financial year ended 30 June 2025.

1. Credit sales of \($520\) 000 of machinery was sold and delivered to customers in June 2025 though the payments would not be received from the customers until July and August 2025. Past experience would suggest that approximately 2% of these payments will never be received from customers.

2. CCC received \($80\) 000 cash from a customer in June 2025 as payment for special purpose machinery which is to be manufactured and shipped to the customer in August 2025.

3. CCC began renting out their excess warehouse space on 1 April 2025, on which date it received \($12\) 000 cash from your tenant for 6 months’ rent in advance.

4. CCC received 10 000 shares in Choi Ltd on 20 June 2025, on which date the shares were trading at \($8.20\) per share, as a gift from a grateful client. Prepare the journal entry to record the donation.

5. CCC received an item of equipment as settlement for goods sold on credit for \($18\) 000. On the date of sale the equipment had a fair value of \($21\) 000 and a carrying amount in the customer’s records of \($15\) 000. Prepare the journal entry to record the receipt of the equipment.

Required

(a) Briefly discuss how a company such as CCC determines whether it is a reporting entity.

(b) In the light of the Conceptual Framework, state the amount of income that should be recognised in the year ended 30 June 2025 for each of the items listed above. Justify your answer by reference to the income definition and recognition criteria.