Scone developed a video game called “Playfun”, ten years ago. This game was extremely profitable and Scone release a new game in the “Playfun” series every year. The game continue to be best sellers and the directors have produced cash flow projections for the “Playfun” series over the next five years
Scone developed a video game called “Playfun”, ten years ago. This game was extremely profitable and Scone release a new game in the “Playfun” series every year. The game continue to be best sellers and the directors have produced
Scone plans to sell a surplus office property in order to raise fund for the development of new game to meet the market demand. On 1 November 2020, the entity became committed to a plan to sell the office and has already found a potential buyer. However, it was discovered that the building had dry rot and substantial remedial work would be necessary, therefore the property will not be sold until the problem has been rectified. This is not expected to occur until the year end of 2021 as the company had cash flow constrained.
Critically evaluate the accounting treatment of the above in the financial statements of Scone for the year ended 31 December 2020.
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