Forman Ltd is an estate agency. The new accountant is unsure how to record the following.
• One of the estate agents, Mrs Michelle, secured an offer to purchase a property on behalf of a seller. Mr Caveman, on 28 December 20X3.
• The purchaser, Mr. Anderson, has offered to pay C200 000 for the property.
• If the seller, Mr Caveman, accepts the offer, the seller will have to pay the Fortmann estate agency C14 000 in estate agent’s commission, of which C8 000 will be paid to Mrs Michelle.
• The seller accepted the offer on 29 December, but the purchaser has three months to etract his offer (called a ‘cooling off period’).
Discuss the recognition of the revenue from the commission on the sale of the property in the financial statements of Fortmann Estate Agency for the financial year-ended 31 December 20X3.