On $15$ October $2023,$ Purple Press $($Pty$)$ Ltd entered into a contract with Plus Accounting $($Pty$)$ Ltd in terms of which Purple Press $($Pty$)$ Ltd will supply all of their offices with

brand new Business $358$ci printers.

Plus Accounting $($Pty$)$ Ltd has five offices, and they require two printers per office. Plus

Accounting $($Pty$)$ Ltd will pay an all$-$inclusive price of R$85000$ per printer. Besides

the printer unit, the purchase price also includes the set$-$up and configuration of each

of the printers, as well as a $16-$month maintenance contract.

The printers were delivered to Plus Accounting $($Pty$)$ Ltd on $29$ October $2023.$ The setup and configuration of the printers were done by Purple Press $($Pty$)$ Ltd$’$s technicians

on $31$ October $2023.$ Plus Accounting $($Pty$)$ Ltd paid the full purchase price on $30$ 

November $2023.$

The following prices were applicable on the transaction date:

Cost price Sales price

Business $358$ci printer R$30000$ R$45000$

Technician services $($Note $1)$ R$990$ per hour R$1500$ per hour

Note $1–$ Due to salary increases, the cost price and the sales price per technician

hour will increase by $3\mathrm{.}5\%$ effective $1$ January $2024$ and another $3\mathrm{.}5\%$ effective $1$ 

January $2025.$

The set$-$up and configuration of a Business $358$ci printer normally takes $45$ minutes

for a technician to complete.

For maintenance contracts Purple Press $($Pty$)$ Ltd charges their clients a standard $1\mathrm{.}5$ 

technician hours per month per printer, irrespective of whether the client makes use

of the full $1\mathrm{.}5$ hours per month. With reference to Transaction $2,$ prepare all the general journal entries to

account for the contract to supply the printers to Plus Accounting $($Pty$)$ Ltd in

the records of Purple Press $($Pty$)$ Ltd for the $31$ December $2023$ financial year

in accordance with the IFRS $15$ of the International Financial Reporting

Standards. Note: The general journal entry relating to the maintenance contract

should be provided for in $1$ entry $($ie$.$ maintenance services for the applicable

period should be recognised in one general journal entry$).$

No general journal

entries are required for the initial purchase of the printers.

Journal dates are required. Journal narrations are not required.

 

 

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