Reference no: EM132970690

During the year ended 31 December 2020, the following transactions were entered into by Jetstream plc

(1) on 1 January 2020, Jetstream agreed to sell a plot of land to another entity for 5 million cash. the land had a carrying value and a fair value at that date of 4 million. on the same date, Jetstream entered into a binding agreement with the same counterparty to repurchase the land on 1 July 2021 for 5.5 million cash.

(2) On 1 December 2020, Jetstream delivered goods with an invoice value of 400,000 to a customer. The agreement with the customer was that the goods would be paid for only if the customer sold them on. If they were not sold on 31 January 2021, the customer could pay for them, or return them without a penalty. Jetstream could request the return of the goods at any time until the customer paid for them. The goods had cost Jetstream 340.000 to manufacture. On 31 December 2020 none of the goods had been paid for by the customer, and non returned.

(3) On 10 December 202, Jetstream delivered goods with an invoice value of 250.000 to another customer. The agreement with the customer was that the goods would be paid for on sale to a third party or on 31 January 2021. However in this case there was no right of return once the customer accepted delivery and was satisfied the goods were as ordered and of good quality. The goods had cost Jetstream 160.000 to manufacture. On 31 December 2020, non of the goods had been paid for by the customer.

Problem 1: In the case of 1 to 3 above explain using journals, how the transactions should be accounted for under IFRS, justifying for your answer, Assume no entries have already been made in respect of the above transactions.