Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1 (26 marks) Sun Telecom Ltd is a telecommunications provider. The company entered into a contract on 1 October 2021, under which the customer paid
1 (26 marks) Sun Telecom Ltd is a telecommunications provider. The company entered into a contract on 1 October 2021, under which the customer paid $730 for a handset bundled with a 200-minute talk time plan at $59 per month. The customer will pay the monthly subscription of $59 at the end of each month. The contract lasts for 24 months. Assume that the fair values of the handphone and two-year mobile service are $1,000 and $52 per month, respectively. Required: (a) Identify the respective performance obligations in this contract. (4 marks) (b) How much revenue should be recognised in the 3 months ended December 2021. Show all your workings clearly in a table and round off answers to the nearest cent, where applicable. (c) Prepare the necessary journal entries for: (i) (10 marks) The inception of the contract on 1 October 2021; and (ii) The three months ended 31 December 2021. Show all your workings clearly. (12 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started