Question 3 (8 marks) Tang Co. enters into a contract to sell Product A and Product B on 1 January 2015, for an upfront cash payment of $150,000. Product A will be delivered in 2 years (1 January 2017) and Product B will be delivered in 5 years (1 January 2020). Tang allocates the $150,000 to Products A and B on a relative standalone selling price basis as follows: Standalone selling prices Percent allocated Allocated amounts $ $ Product A 40,000 25% 37,500 Product B 120,000 75% 112,500 160,000 150,000 Tang uses an interest rate of 6%, which is its incremental borrowing rate. Tang Co. adopts HKFRS 15 Revenue from Contracts with Customers with effect from 1 January 2015. Required: (8marks) (a) Prepare the journal entries necessary for Tang for the year ended 31 December 2015 (b) Prepare the journal entries necessary for Tang for the year ended 31 December 2016 (c) Prepare the journal entries necessary for Tang for the year ended 31 December 2017 (d) Prepare the journal entries necessary for Tang for the year ended 31 December 2018 (e) Prepare the journal entries necessary for Tang for the year ended 31 December 2019 (f) Prepare the journal entries necessary for Tang as at 1 January 2020

Question 3 (8 marks) Tang Co. enters into a contract to sell Product A and Product B on 1 January 2015, for an upfront cash payment of $150,000. Product A will be delivered in 2 years (1 January 2017) and Product B will be delivered in 5 years (1 January 2020). Tang allocates the $150,000 to Products A and B on a relative standalone selling price basis as follows: Standalone Percent Allocated selling prices allocated amounts $ $ Product A 40,000 25% 37,500 Product B 120,000 75% 112,500 160,000 150,000 Tang uses an interest rate of 6%, which is its incremental borrowing rate. Tang Co. adopts HKFRS 15 "Revenue from Contracts with Customers with effect from 1 January 2015. Required: (8marks) a Prepare the journal entries necessary for Tang for the year ended 31 December 2015 6. Prepare the journal entries necessary for Tang for the year ended 31 December 2016 Prepare the journal entries necessary for Tang for the year ended 31 December 2017 Prepare the journal entries necessary for Tang for the year ended 31 December 2018 @ Prepare the journal entries necessary for Tang for the year ended 31 December 2019 1 Prepare the journal entries necessary for Tang as at 1 January 2020 Question 3 (8 marks) Tang Co. enters into a contract to sell Product A and Product B on 1 January 2015, for an upfront cash payment of $150,000. Product A will be delivered in 2 years (1 January 2017) and Product B will be delivered in 5 years (1 January 2020). Tang allocates the $150,000 to Products A and B on a relative standalone selling price basis as follows: Standalone Percent Allocated selling prices allocated amounts $ $ Product A 40,000 25% 37,500 Product B 120,000 75% 112,500 160,000 150,000 Tang uses an interest rate of 6%, which is its incremental borrowing rate. Tang Co. adopts HKFRS 15 "Revenue from Contracts with Customers with effect from 1 January 2015. Required: (8marks) a Prepare the journal entries necessary for Tang for the year ended 31 December 2015 6. Prepare the journal entries necessary for Tang for the year ended 31 December 2016 Prepare the journal entries necessary for Tang for the year ended 31 December 2017 Prepare the journal entries necessary for Tang for the year ended 31 December 2018 @ Prepare the journal entries necessary for Tang for the year ended 31 December 2019 1 Prepare the journal entries necessary for Tang as at 1 January 2020