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QUESTION THREE Bond Limited entered into an agreement on 5 January 2017 to supply 420 000 widgets to a customer in exchange for R420 000, to be paid in full on 20 January 2017. Bond Limited delivered the widgets on 31 January 2017, but at 28 February 2017, its financial year-end, Bond Limited has still not received any payment from the customer. The accountant has processed the following journal entry to account for this information: Credit Debit 420 000 5 January 2017 Receivable (A) Revenue from customer contract Revenue from customer contract satisfied at a point in time, measured at transaction price 420 000 The financial director is concerned that this journal should not have been processed at 5 January 2017 but that it should have been processed on 20 January 2017, instead, and at which point a contract asset should have been debited instead of a receivable. Required a) Provide the definitions for the terms 'contract asset', 'receivable' and 'contract liability and then briefly identify the essential difference between these items. b) List the steps that must be followed before revenue may be recognised in terms of IFRS 15 Revenue from contracts with customers. c) Prepare a document explaining when the revenue should be recognised, and showing the journal/s that you believe should have been processed, assuming: The contract is cancellable; and The contract is non-cancellable