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Question - Kangaroo Ltd enters into an agreement to sell Inventory to Emu Ltd for $79 000 on 10 October 2020. Emu ltd intends to use this as an Non-current asset. Kangaroo Ltd delivers the Inventory on 19 October 2020. Emu Ltd pays for the Inventory on 10 November 2020.
The agreement states that, from the date of delivery, Kangaroo Ltd must provide maintenance for the Inventory for the first 12 months. Emu Ltd is entitled to a refund of 17% of the amount paid if Kangaroo Ltd does not satisfactorily maintain the Inventory for the year as required.
Required - Prepare the journal entries to be recorded by Kangaroo Ltd as per the recognition criteria in AASB 15/IFRS 15.
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