On 1 February 2020, MacroDot Ltd entered into an agreement with Customer S to develop a...

   

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On 1 February 2020, MacroDot Ltd entered into an agreement with Customer S to develop a new database system (both hardware and software) for Customer S. The agreement states that the total consideration to be paid for the system will be $860 000. MacroDot Ltd expects that its total costs for the system will be $670 000. As the end of its reporting period, 30 June 2020, MacroDot Ltd had incurred labour costs of $130 000 and materials costs of $360 000. Of the materials costs, $60 000 is in respect of materials that have not yet been used on the system. Of the labour costs, $25 000 is an advance payment to a subcontractor who had not performed their work on the project as at 30 June 2020. As at 30 June 2020, Customer S had made progress payments to MacroDot Ltd of $500 000. MacroDot Ltd calculates the measurement of progress using input methods in accordance with paragraph B18 of AASB 15/IFRS 15. Required Calculate the revenue to be recognised by MacroDot Ltd for the year ended 30 June 2020 and prepare the journal entries to record the transactions described. Assume all of MacroDot Ltd's costs are paid for in cash. On 1 February 2020, MacroDot Ltd entered into an agreement with Customer S to develop a new database system (both hardware and software) for Customer S. The agreement states that the total consideration to be paid for the system will be $860 000. MacroDot Ltd expects that its total costs for the system will be $670 000. As the end of its reporting period, 30 June 2020, MacroDot Ltd had incurred labour costs of $130 000 and materials costs of $360 000. Of the materials costs, $60 000 is in respect of materials that have not yet been used on the system. Of the labour costs, $25 000 is an advance payment to a subcontractor who had not performed their work on the project as at 30 June 2020. As at 30 June 2020, Customer S had made progress payments to MacroDot Ltd of $500 000. MacroDot Ltd calculates the measurement of progress using input methods in accordance with paragraph B18 of AASB 15/IFRS 15. Required Calculate the revenue to be recognised by MacroDot Ltd for the year ended 30 June 2020 and prepare the journal entries to record the transactions described. Assume all of MacroDot Ltd's costs are paid for in cash.

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The image provided describes a contractual agreement between MacroDot Ltd and Customer S to develop a new database system for a total consideration of ... View the full answer