1.What is the 5-step process to recognise revenue? 2. What criteria needs to be met for a...
Question:
1.What is the 5-step process to recognise revenue?
2. What criteria needs to be met for a contract to exist?
3. Light up Limited signed a contract on the 28th of February
2022, with Soni Limited (the customer), to install solar panels at their new offices in Umhlanga, the terms of which included the following:
- Light Up Limited agreed to supply and install the solar panels before the 30th of June 2022
- Soni Limited agreed to pay R150 000, in advance on the 31st of March 2022. Light Up Limited installed the solar panels on the 17th of June 2022 on which date, the customer obtained control. Soni Limited paid the promised consideration on the 31st of May 2022.
Required:
Prepare the journal entries in Light Up Limited if:
a) Contract is non-cancellable
b) Contract is cancellable in the event of non-performance
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones