Discuss how the following independent scenarios should be treated in the financial statements for the year ended 31 December 2016, in accordance with MFRS15, Revenue from Contracts with Customers. a) Telecom Bhd., a telecommunications company sells an exclusive model 'IPhone A9 Gold Silver' and unlimited calls to customers on a 24 months contract. Didi pays RM120 per month on 15 January 2016 for the network service and receive a phone at no charge. At the same time, the company sells to Nana the same model for RM960 and the same network service for RM80 per month. Those amounts are also the prices that the company charges when a mobile phone or a network service is sold separately. (5 marks) b) Intel Technology enters into a contract with Future College to deliver 400 computers for total price of RM800,000 (RM2,000 per computer). For necessary preparation works, Future College and Intel Technology agree to deliver computers in four separate deliveries during the forthcoming four months with 100 computers in each delivery. Future College takes control over the computers at delivery. After the first delivery is made in June 2016. Future College and Intel Technology amend the contract, which Intel Technology will supply 200 additional computers. The price for additional 200 computers was agreed at RM300,000 being RM1,500 per computer. Intel Technology provided a discount of 25% for additional delivery because it hopes for the future cooperation with Future College. At 31 December 2016, Intel Technology delivered 500 computers ( 400 as agreed initially and 100 under the contract amendment). A property contractor, HUHA Bhd. builds a residential mall at Jalan Ismail consisting of 30 apartments. Apartments have a similar size, proportions and can be customized to clients' needs. HUHA Bhd. enters into a contract with Husni on 1 January 2016, who wants to buy five identical apartments and agrees with a price of RM350,000 per unit of apartment. The contract between Husni and HUHA Bhd. is not transferable and Husni cannot terminate the contract. If Husni defaults on the contract before its completion, HUHA Bhd. has the right for all contractual prices in the event that HUHA Bhd. decides to complete the contract. The payment schedule is as follows: - Upon signing the contract, Husni pays a deposit of RM35,000 each. - 1 year prior to planned completion, HUHA Bhd. will deliver progress reports to Husni and he needs to pay RM126,000 each. - Upon the completion of the construction, the legal ownership of the apartments is transferred to Husni and he pays the final amount of the contract price. Assumed period of construction is 2 years from the date of contract. (7 marks) d) CheapSale Bhd. operates a website that enables customers to make online purchases of scarves from a range of suppliers who deliver the scarves directly to the customers. The CheapSale's website facilitates payment between the suppliers and the customers at prices that are set by the suppliers. The payment is required from customers before orders are processed and all orders are non-refundable. Based on the agreement with suppliers, when a scarf is purchased via the website, CheapSale Bhd. is entitled to get 15% commission of the sales price and the company has no further obligations to the customer after arranging for the products. During 2016, CheapSale Bhd.'s website received orders for 80,000 scarves and the customers paid RM80 per scarf. (6 marks)
