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John Gate, a propitious and renowned manufacturing business has signed a contract with a big...

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Accounting

John Gate, a propitious and renowned manufacturing business has signed a contract with a big chain of retail stores. The customer commits to buy at least P20 million of products over the next 12 months. The terms of the contract requires John Gate to make a payment of P1 million to compensate the customer for changes that it will need to make to its retail stores to accommodate the products. By the 31 December 2019, John Gate has transferred products with a sales value of P4 million to the customer.

Required: How much revenue should be recognised by John Gate in the year ended 31 December 2019? (5 marks)

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\table[[1,Account,Debit,Credit],[22,Cash,40450,],[33,Accounts Receivable,4000,],[4,Interest Receivable,,],[55,Supplies,2800,],[6,Prepaid Insurance,6000,],[7,Prepaid Rent,15000,],[8,Equipment,40000,],[9,Accumulated Depreciation,,],[10,Long-Term Investments,20000,],[11,Accounts Payable,,250],[12,Dividend Payable,,],[13,Unearned Revenue,,1500],[14,Short-Term Notes Payable,,30000],[15,Interest Payable,,],[16,Income Taxes Payable,,],[17,Common...