Question $2$

$(15$ Marks$)$

Nexa $($Pty$)$ Ltd specialises in delivering innovative industrial automation and energy management solutions. The company provides a wide range of services.

When a customer purchases a customised system from Nexa $($Pty$)$ Ltd$,$ which includes installation services and an annual maintenance plan, the contract contains a standard clause allowing cancellation if the installation is not completed within the agreed time frame.

The stand$-$alone selling prices for the goods supplied and services rendered by Nexa $($Pty$)$ Ltd are as follows:

Renewable energy system $($including all necessary equipment$)$: R$150000$

Installation service: R$20000$

Maintenance plan $($annual$)$: R$8200$

Nexa $($Pty$)$ Ltd concluded the following sales transactions and approached you for help to correctly account for the transactions for the year ended $30$ June $2025.$

Iransaction $1$:

On $15$ November $2024,$ Nexa $($Pty$)$ Ltd signed a contract to deliver a custom machine to Prime CC by $31$ January $2025.$ The contract required Prime CC to pay R$600000$ upfront by $15$ December $2024.$

However, Prime CC made the payment later, on $22$ December $2024.$ Nexa $($Pty$)$ Ltd delivered the machine as scheduled on $31$ January $2025.$ The contract is non$-$cancellable due to the tailored nature of the machine, regardless of performance issues by either party.

Iransaction $2$:

On $1$ February $2025,$ Innovate Limited purchased a customised renewable energy system, including installation services and an annual maintenance plan, from Nexa $($Pty$)$ Ltd for R$145000.$ On $3$ February $2025,$ Nexa $($Pty$)$ Ltd delivered and installed the system for Innovate Limited. Innovate Limited paid the full transaction price to Nexa Pty$)$ Ltd on $3$ February $2025.$

The maintenance plan includes six services of the renewable energy system, to be performed every two months on the first day of the month, commencing on $1$ July $2025.$

Required:

$2\mathrm{.}1$ Prepare the journal entries required to account for the sale of the machine to Prime CC

$(5)($transaction $1)$ in the books of Nexa $($Pty$)$ Ltd for the years ended $30$ June $2025.$

Journal dates and narrations are required

$2\mathrm{.}2$ In terms of the transaction with Innovate Limited $($transaction $2),$ allocate the transaction price to

$(10)$ the performance obligations in the contract.

Round amounts to the nearest rand and ratio calculations to $2$ decimals.

Show all your workings.