IFRS 15 revenue from contract with customers identifies 5 steps in revenue recognition one of the steps is determining the transaction price. Explain how the transaction price is determined when the contract involves Variable Consideration (4 marks) ii)On January 1 , 2020 Toyota enters into a contract to assemble 10 Motor Vehicles for the ministry of works and supply in Zambia . The total contract price is K2, 500,000 .The contract attracts a performance bonus of K250,000 if the assembling is completed by July 31, 2020. The bonus is reduced by K25,000 each week that completion is delayed. Toyota commonly includes these completion bonuses in its contracts and, based on experience, estimates the following completion outcomes:

Completed by	Probability
July 31, 2020	65%
August 7, 2020	25%
August 14, 2020	10%

a) Calculate the transaction price for this contract and show the journal entry(6 marks)

b) Refer to the same information about Toyota in question 3 above, but assuming that Toyota has limited experience with the assembling of cars and this is the first time Toyota is having such a contract.

Calculate the transaction price and show the journal entry( 3 marks)

iii)Afri-tank Zambia sells and installs tanks .Customers can either by a tank and find another vendor to do the installation or they can pay for both. The price for the tank only is K250,000 and installation only is K50,000. On March 1 Afri-tank sold a tank to Mulungush university at a price of K280,000,this sales price includes an installation fee. The installation is expected to take 6 months to complete. Afri-tank Zambia year-end is 31 March.

Prepare the journal entries (if any) to record the sale on March 1 in Afri-tank s books (7 marks)