Question 3: Accounting for revenue Total Marks 20) Anna is a junior accountant in City Stores, a retail chain in Auckland. City Stores sells a range of products including clothes, sports items, toys, and home decorations. The store also sells gift cards to customers with values of $20, $50, $100. Anna is having concerns about how to account for following transactions. The following transactions are related to the financial year ending 31 December 2019. 1. Transaction 1: Selling a $100 gift card to a customer. (5 marks) 2. Transaction 2: An exercise machine has been sold to a customer with one-year warranty. However, the customer negotiated to extend the warranty to three years with two compulsory maintenance services per year by paying an extra fee of $250. (5 marks) 3. Transaction 3: Sports items were sold to a long-term customer for $40,000 on 1 March 2019 which will be paid in two years' time. City Store's cost of capital is 10%. (10 marks) Required: For each of the above transactions, comment on the revenue recognition and measurement implications according to NZ IFRS 15, Revenue from Contracts with Customers. Your answer should include following: 1. Apply the five steps for revenue recognition 2. Determine the amount of revenue to be recognised for the year ended 31 December 2019 with justification 3. Record the journal entries to record the correct revenue for the accounting period ending 31 December 2019. Click or tap here to enter text