Identity the financial instrument involved

Assignment Help Financial Accounting

Reference no: EM132971863

Question 1 A. Happy Bhd is in the business of wholesaling office equipments. On 1 August 2009, a customer, Yuppy, placed an order for 20 units of equipments at RM40,000 per unit. The equipments were delivered on 15 September 2009. By 31 December 2009, Yuppy has paid RM500,000 of the amount owed. Happy Bhd has a legal obligation to donate RM300,000 each year to a charitable body, XYZ Charity.

On 6 September 2010, Happy Bhd and Yuppy came to an agreement for Yuppy to remit the remaining amount owed directly to XYZ Charity. XYZ Charity was informed of this agreement which also stated that, in the event Yuppy failed to deliver the said amount, Happy Bhd has no obligation whatsoever to deliver the cash. XYZ Charity agreed to the arrangement. The company's financial year ends on 31 December.

Required:

In the context of FRS 139 Financial Instruments: Recognition and Measurement:

(i) Identity the financial instrument involved and state the date at which initial recognition took place. Show journal entries for the initial recognition.

(ii) Explain whether or not Happy Bhd should derecognise the financial instrument related to the donation on 6 September 2010. Show the related journal entries.

Reference no: EM132971863

Questions Cloud

Opportunity faced by health foods : What are some distinct marketing alternatives (approaches that are very different from one another) that might be pursued by Healthy Foods

Discuss the powers of the liquidator : Discuss the powers of the liquidator in winding up a company in Fiji. Explain whether these powers are the same or different in the circumstances identified

Case disruption in detroit : In the case Disruption in Detroit: Ford, Silicon Valley, and Beyond (A)

Constructing a payoff table : As an investor, find approach for profit. Demonstrate your strategy is true by constructing a payoff table to indicate the outcomes at expiration.

Identity the financial instrument involved : Identity the financial instrument involved and state the date at which initial recognition took place. Show journal entries for the initial recognition

Calculate the basic earnings per share for the year : Calculate the Basic Earnings per Share for the year ended 31 December 2019 and the corresponding figure for 2018 in accordance with IAS 33: Earnings per Share

How is project management used in law enforcement : How is project management used in law enforcement?

Examining the feasibility of quantitative research : What are the ethical concerns when examining the feasibility of quantitative research in a dissertation?

Determine the weighted average cost of capital : Determine the Weighted Average Cost of Capital (WACC) for target capital structure - Evaluate which showroom should be selected (Hints: use NPV and IRR)

User Account

All Pages