On 1 March 20X0 Yucca Co acquired a machine from Plant Co under the following terms:...

  

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On 1 March 20X0 Yucca Co acquired a machine from Plant Co under the following terms: List price of machine Import duty Delivery fees Installation costs Pre-production testing Purchase of a five-year maintenance contract with Plant Co 82,000 1,500 2,050 9,500 4,900 7,000 In addition to the above information, Yucca Co was granted a trade discount of 10% on the initial list price of the machine and a settlement discount of 5% if payment was received within one month of purchase. Yucca Co paid for the machine on 25 March 20X0. Required Explain how the above information should be accounted for in the financial statements of Yucca Co for the year ended 28 February 20X1. On 1 March 20X0 Yucca Co acquired a machine from Plant Co under the following terms: List price of machine Import duty Delivery fees Installation costs Pre-production testing Purchase of a five-year maintenance contract with Plant Co 82,000 1,500 2,050 9,500 4,900 7,000 In addition to the above information, Yucca Co was granted a trade discount of 10% on the initial list price of the machine and a settlement discount of 5% if payment was received within one month of purchase. Yucca Co paid for the machine on 25 March 20X0. Required Explain how the above information should be accounted for in the financial statements of Yucca Co for the year ended 28 February 20X1.

Answer rating: 100% (QA)

List price of Machine 8000000 Trade Discount ie 10 of 8000000 7200000 Import Duty 500000 Delive... View the full answer