Arrangement terms:

a. Construct a road - completing construction within two years (i.e., Years 1 and 2);

b. Maintain and operate the road to a specified standard for eight years (i.e., Years 3 to 10).

c. Resurface the road when the original surface has deteriorated below a specified condition. The operator estimates that it will have to undertake the resurfacing at the end of year 8.

The contracts end in Year 10.

YearContract Cost

Construction services1500

2500

Operation services3-1010

Road resurfacing8100

All cash flows are assumed to take place at the end of the year. The operator estimates that the stand-alone selling price of the construction services is equal to theforecast construction cost 5%.

Consideration:

The terms of the arrangement allow the operator to collect tolls from drivers using the road. In addition, the grantor guarantees the operatora minimum amount of P700 and interest at a specified rate of 6.18% to reflect the timing of cash receipts. This is allocated to financial asset.

The operator forecasts that vehicle numbers will remain constant over the duration of the contract and that it will received tolls of P200 in each of Years 3 to 10.

1. The number of performance obligations is?
2. The stand- alone selling price of construction service?
3. The amount allocated to financial asset in?
4. The amount allocated to intangible asset?
5. The allocation to financial asset per year?
6. The Interest Income at the end of year 2?
7. The annual collection of toll fees is?
8. The interest expense at the end of year 2 is?