Are the following can be recognised as revenue? a. In 21 May 2019, an order has been
Question:
Are the following can be recognised as revenue?
a. In 21 May 2019, an order has been received from customer to produce 1000 bars of chocolates for the company opening ceremony. The value of the order was RM2,000. The opening ceremony held on 5 July2019. The company’s financial year end is at 30 June every year. Can the company recognised revenue on 21 May 2019
b. On 1 July 2019, the company transfer the goods value RM5,000 to the agent in Kota Kinabalu. The goods categorized as a cosmetic product. The financial year end for the company is 31 December every year. Question: Can the company recognized RM5,000 as revenue on 1 July 2019?
c. The mechanic did some repair job last week and not records anything in the ledger until he receives the payment of RM750 today. The mechanic recognised the revenue when upon receiving the money. Discuss whether is the mechanic did proper revenue recognition?
3. Are the following expense?
a. Purchased of financial calculator RM135 for office use.
b. Research and development fees RM30,000 for a new product which the company proceed with the production. The company applied financial facility from the bank and confident with the new product to penetrate the local market as market leader.
during its development
c. Cost of repairs RM3,000 for the damaged floor for the company.
4. For the following, determine whether an ASSET or EXPENSE should be charged, and state your reasons:
(a) Cost of removing two small machines RM4,500, to make way for a larger new machine.
(b) cost of major repairs to equipment, RM2,000. The need for repair was discovered immediately after acquisition. There is no warranty on the equipment
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones