Question $2(21$ marks$)$

Simpson Inc. buys and sells machines that are used in businesses across Ontario. The company follow IFRS.

Simpson Inc sells a machine to Bart Inc. on August $16$th$,2023.$ The selling price for the machine is usually $$50,400.$

Simpson inc. will also install the machine. The estimated fair value of installing the machine is $$3,920.$

Simpson Inc. will also provide maintenance for the machine for $2$ years. The estimated fair value of maintenance is $$1,680.$

Simpson lnc$.$ sold the machine, installation and maintenance to Bart lnc$.$ for $$52,000.$ The machine cost simpson inc $$22,000.$ The company uses the perpetual inventory system

Simpson inc bills and delivers the machine on september $1$st$,2023.$

Simpson completes the installation of the machine on september $15$ th$,2023.$ The customer pays cash for the installation on september ${15}^{th}.$

The maintenance starts on october $15t,2023.$ The customer pays cash for the $2$ years of maintenance.

On November let Bart Inc. infoms Simpson Ine, that they will be not be able to pay their account that is due. The two parties enter into an agrement that the account will be converted into a non$-$interest bearing promissory note to be repaid in one year from now: Bart Inc. borrows fund at a rate of $8\%.$ The company's year end is December $31$ :

i$.$ Identify the performance obligations and calculate the revenue for each performance obligation $(6$ marks$)$ Hint frier to chapter $6$ allocating the transaction price to separate perfomance obligations.

$1$i$.$ Prepare the joumal entries for $2023$ and $2024.$ Hint remember to allocate the revenue among the different performance obligations and then use this infomstion when you prepare the joumal entries In other use the anawers you calculated in part $1.$ In your answer do not use the discount on notes account. $(16$ marks$)$ Hint this part uses concepts from chapter $6$ and chapter $7$ non$-$interest bearing notes.