Question
MusicMaker Pte Ltd (MMPL), incorporated in Singapore and adopts the Singapore Financial Reporting Standards (SFRSs), sells its X-model piano regularly at $3,600. The cost of
MusicMaker Pte Ltd (MMPL), incorporated in Singapore and adopts the Singapore Financial Reporting Standards (SFRSs), sells its X-model piano regularly at $3,600. The cost of the piano to the company is $2,000. During the month of March 20X1, the company had a promotion package and customers who purchased the X-model would be given four free music lessons, to be conducted during the month of April, and two free piano tuning sessions, to be done every six months. The four-music lesson package can be purchased at $240 on its own and the company charges $80 per tuning session. On 2 March 20X1, a customer, Annie, purchased the X-model from the company and paid the full amount. The piano was delivered on 4 March 20X1.
Required: Explain how MMPL will recognise the revenue arising from Annie's purchase of this promotion package using the five-step model from FRS 115 Revenue from Contracts with Customers.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started