Entity A sells a machine to Entity B on 1 May 2022 for a total price of $6,540,000, which incorporates both the sale of the machine and supporting service. Due to the specialized nature of the machine, at the inception of the contract, Entity A has agreed to provide a supporting service for the next three years?

The annual cost to Entity A of providing this service will be $60,000. Entity A usually earns a gross profit margin of 20% on such contracts?


REQUIRED:

1) Evaluate the revenue in Entity A's Statement of Profit or Loss for the year ended 30 September 2022?

Answer rating: 100% (QA)

To evaluate the revenue in Entity As Statement of Profit or Loss for the year ended 30 September 2022 we need to determine the portion of the contract ... View the full answer