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QUESTION 5 IT Gadget Co. provides hardware, software and IT services to small and medium business customers. It has developed an accounting software package.
QUESTION 5 IT Gadget Co. provides hardware, software and IT services to small and medium business customers. It has developed an accounting software package. The company offers a supply and installation service for RM10,000 and a separate two-year technical support service for RM5,000. During the year, IT Gadget enters into a contract with Customer B and offers a combined goods and services contract which includes both of these elements for RM12,000. Payment for the combined contract is due one month after the date of installation. Required: a) Identify the performance obligation(s) within the contract with Customer B. b) Discuss the allocation of transaction price to each performance obligation. (4 marks) (6 marks) (Total 10 marks)
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