Question 5: Revenue Recognition (4 marks)

Worldwide Phone Corp. sells prepaid telephone cards to customers. They then pay

the telecommunications company for the actual usage of the phone lines relating to

the prepaid telephone cards. In January 2017, Worldwide Phone sells $5,000 worth of

prepaid cards. It then pays on usage, which is as follows; February is 50%, , March

35% and April 15%. The total payment by Worldwide to the telecommunications

company for lines over the three months is $4,000.

Required: Indicate how much income Worldwide should recognize as income in

January, February, March and April under IFRS.