1. Mr Ramli has agreed and signed the Sales and Purchase Agreement (SPA) with JP Construction Berhad to buy a bungalow unit that comes together with a gated and guarded security system. The said bungalow is still under construction but expected to be completed and handover within two years. Mr Ramli had already paid a deposit of 10% from the sales value but it was refundable, subject to bank loan approval. The guard security system is to be managed by the residential committee when the project is fully completed.

Required:

a) Discuss whether JP Construction Berhad can apply MFRS 15 Revenue from Contracts with Customers to the contract with Mr Ramli.

b) Determine the performance obligations to be satisfied in the contract in exchange for consideration.

2. Salsabila Bhd received an order from Manuka Enterprise to deliver a special chemical stock on 1 March 2020 valued at RM30,000. It is Salsabila Bhds policy to require the purchaser to settle the amount due when placing the order. Thus, Manuka Enterprise made a full settlement to Salsabila Bhd on the same day the order was made. On 2 April 2020, the chemical was successfully delivered to Manuka Enterprise.

Required:

MFRS 15 Revenue from Contracts with Customers, advise Salsabila Bhd on how to recognize the revenue and support your answer by showing relevant journal entries.

3. Kurnia Alam Bhd is given a project by Kerajaan Negeri Melaka to construct a hostel for Universiti Melaka. The company will bear all the costs of construction, which is estimated at RM1.2 million. As a consideration, Kerajaan Negeri Melaka will transfer a piece of land with a market value of RM1.5 million, to the company.

Required:

Explain how the transaction price is determined for this transaction.