ConcerTime is a newly established company that is trying to promote new musicians. The company organizes and holds concerts all over Pakistan annually during the winter/spring season. Financial year for the company starts on 1st of July. ConcerTime sells tickets for concerts as follows:

i) On day walk up single entry: Ticket prices are Rs 3,000/-. No return allowed

ii) Advance Purchase single entry: These tickets have to be purchased for a particular concert before the season starts and normally cost Rs 2,000/- . No refunds allowed.

iii) Annual pass: Allows entry to unlimited concerts and normally costs Rs 25,000/-. No refunds allowed

REQUIRED

What are the requirement of revenue recognition in accordance with IFRS 15? How should ConcerTime recognize for each the 3 types of revenue stream given above (make journal entries to aid your explanation)

iv) ConcerTime is also thinking of allowing anyone who works as a volunteer at the concert to receive a complimentary entry. How would you propose to record this type of sale?

PART II

CFR Ltd, has agreed to provide twelve months of bookkeeping services to Ace Furniture. An office furniture retailer. CFR will compile the accounting records of Ace every month and provide unaudited financial statements. CFR has agreed to accept office furniture in return for their services. The furniture would normally sell for Rs. 450,000. CFR has indicated that they would typically charge approximately Rs. 40,000/month for similar bookkeeping services, although the actual amount invoiced per month would depend on the volume of transactions and a number of other factors. CFR estimates that its office furniture normally lasts for five years.

REQUIRED:

Assume the contract described above is signed on October 1 and CFRs fiscal year end is December 31. Prepare all the required journal entries for CFR between these two dates.