An entity promises to sell 120 sacks of rice to a customer for 240,000. The products are transferred to the customer over a six-month period. The entity transfers control of each sack at the shipping point. After the entity has transferred control of 60 products to the customer, the contract is modified to require the delivery of an additional 30 products (a total of 150 identical products) to the customer. The additional 30 products were not included in the initial contract. Not all of the promised goods were delivered at the agreed date because of some uncontrollable reason. What is your opinion on this transaction
An entity promises to sell 120 sacks of rice to a customer for 240,000. The products are transferred to the customer over a six-month period. The entity transfers control of each sack at the shipping point. After the entity has transferred control of 60 products to the customer, the contract is modified to require the delivery of an additional 30 products (a total of 150 identical products) to the customer. The additional 30 products were not included in the initial contract. Not all of the promised goods were delivered at the agreed date because of some uncontrollable reason. What is your opinion on this transaction
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An entity promises to sell 120 sacks of rice to a customer for 240,000. The products are transferred to the customer over a six-month period. The entity transfers control of each sack at the shipping point. After the entity has transferred control of 60 products to the customer, the contract is modified to require the delivery of an additional 30 products (a total of 150 identical products) to the customer. The additional 30 products were not included in the initial contract. Not all of the promised goods were delivered at the agreed date because of some uncontrollable reason.
What is your opinion on this transaction?
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