On 1 November 2020, JPN Company made an agreement with a customer to supply 8,000 units of merchandise at a price of ¥3,000 per unit. The delivery date was 18 January 2021. The following information was available relating to the merchandise as at 31 December 2020. JPN Company held 6,000 units at a cost of ¥1,690 per unit and the estimated cost to sell the merchandise was ¥1,400 per unit. The unavoidable cost, including the estimated cost to sell, to deliver remaining 2,000 units was ¥3, 200 per unit. 1) What amount of write-down of the merchandise should JPN company recognize in accordance with IAS2 for the year ended 31 December 2020? 2)What amount of provision in relation to the agreement should JPN Company recognize in accordance with IAS37 as at 31 December 2018?
On 1 November 2020, JPN Company made an agreement with a customer to supply 8,000 units of merchandise at a price of ¥3,000 per unit. The delivery date was 18 January 2021. The following information was available relating to the merchandise as at 31 December 2020. JPN Company held 6,000 units at a cost of ¥1,690 per unit and the estimated cost to sell the merchandise was ¥1,400 per unit. The unavoidable cost, including the estimated cost to sell, to deliver remaining 2,000 units was ¥3, 200 per unit. 1) What amount of write-down of the merchandise should JPN company recognize in accordance with IAS2 for the year ended 31 December 2020? 2)What amount of provision in relation to the agreement should JPN Company recognize in accordance with IAS37 as at 31 December 2018?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On 1 November 2020, JPN Company made an agreement with a customer to supply 8, 000 units of merchandise at a price of ¥3,000 per unit. The delivery date was 18 January 2021. The following
information was available relating to the merchandise as at 31 December 2020. JPN Company held 6,000 units at a cost of ¥1,690 per unit and the estimated cost to sell the merchandise was
¥1,400 per unit. The unavoidable cost, including the estimated cost to sell, to deliver remaining 2,000 units was ¥3,200 per unit. 1) What amount of write-down of the merchandise should JPN
company recognize in accordance with IAS2 for the year ended 31 December 2020? 2)What amount of provision in relation to the agreement should JPN Company recognize in accordance with
IAS37 as at 31 December 2018?
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