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Sizzle (Pty) Ltd is a beauty and fragrance retailer with walk-in stores located across South Africa as well as an online store where customers can

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Sizzle (Pty) Ltd is a beauty and fragrance retailer with walk-in stores located across South Africa as well as an online store where customers can have their goods delivered to their doors. The entity has a 31 December financial year-end. During the current financial year, 31 December 2022, management decided to expand their operations by introducing Sizzle Distributors who would sell products on behalf of the entity and earn a commission based on the gross revenue generated. During the current financial year, 6 Sizzle Distributors were employed on a commission basis. The terms of the agreement between Sizzle (Pty) Ltd and the Sizzle Distributors are as follows: - Sizzle (Pty) Ltd carries the risk associated with perfumes and beauty products; - The Sizzle Distributors are not allowed to set prices for any perfumes or beauty products sold to customers; and - The Sizzle Distributors receive an 8% commission based on the gross revenue generated. The following is an extract of financial information for the 31 December 2022 year-end relating to the Sizzle Distributors: 3.1) List the four indicators of an entity acting as an agent in terms of IFRS 15 . (4 marks) 3.2) Based on the indicators above, discuss whether the Sizzle Distributors will be classified as agents in terms of IFRS 15 . (4 marks) 3.3) With reference to IFRS 15, explain separately for Sizzle (Pty) Ltd and the Sizzle Distributors, how they would account for revenue to comply with the requirements of the International Financial Reporting Standards. (4 marks) 3.4) Prepare all the necessary general journal entries to account for revenue in the records of Sizzle (Pty) Ltd and the Sizzle Distributors in terms of IFRS 15 for 31 December 2022. The journals should be done separately for each of Sizzle (Pty) Ltd and the Sizzle Distributors. Journal dates and narrations are not required. (16 marks) Note: - All amounts should be rounded to the nearest Rand. Show all calculations clearly. - Your answer must comply with International Financial Reporting Standards (IFRS)

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