Five G Telephones enters into telephone contracts on the following terms and options:
Xyz mobile phones ...................... €1,000
Basic Y phones .......................... € 200
Basic connection service options:
A ........................................... €40 per month
B ........................................... €15 plus 50 cents per call
Combined services:
Supply of Xyz and connection service €79 per month with a minimum contract period of 24 months.
Required:
Record the entries for the first month for each of the possible transactions assuming the following information:
(a) Xyz phones are purchased from a supplier for €500.
(b) Basic phones are purchased from a supplier for €120.
(c) The average user makes 100 calls a month at a variable cost of five cents per call.
(d) Ignore imputed interest.