Question 6: Variable Consideration Volume Discount

Sung Inc. offers its customers a 3% volume discount if they purchase at least $2 million of its products during the calendar year. On March 31, 2023, Sung has made sales of $700,000 to Arctic Inc. In the previous two years, Sung sold over $3 million to Arctic in the period from April 1 to December 31.

Instructions

a) How much revenue should Sung recognize for the first three months of 2023? Show journal entries under IFRS and ASPE.

b) Assuming that on June 26, Sung made another 1.3 million sales to Arctic, Show journal entries under IFRS and ASPE.

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