- 10 Marks
FR – Nov 2019 – L2 – Q6b – Revenue from Contracts with Customers (IFRS 15)
Calculate the revenue from the service contract with customers for Phonetell Nigeria Limited for the accounting years ended 2019 and 2020.
Question
Phonetell Nigeria Limited is a network service provider registered with the Nigeria Stock Exchange (NSE). The company has been operating in the country for the past 10 years.
On September 1, 2019, the company entered into a service contract with its customers to provide a special model handset and one year of service at a price of N250,000.
If the customers acquired the handset only, it would be sold at a price of N75,000, and if the network service is separately provided for one year duration, the customer will be made to pay the sum of N200,000 for the one-year duration.
The financial year-end of Phonetell Nigeria Limited is September 30.
Required:
Calculate the revenue from this contract for the accounting years ended 2019 and 2020 in accordance with the provisions of IFRS 15.
(10 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: IFRS 15, Revenue Recognition, Service Contracts
- Level: Level 2
- Topic: Revenue from Contracts with Customers (IFRS 15)
- Series: NOV 2019