Reference no: EM132915500

Fun Cooking Equipment Pty Ltd sells advanced kitchen appliances and cooking lessons. On 1 May 2021, Fun Cooking Equipment Pty Ltd signs an agreement with Delicious Cooking Club to provide 2 cooking learning sessions for 10 weeks and 10 units of advanced kitchen appliances. The contract price amounted to $44,000 (GST inclusive), on credit terms n/30 for the appliances and the cooking lessons. This amount also includes one free service to the appliance to be performed twelve months after the delivery of appliances to Delicious Cooking Club.

• The stand-alone price for the 20 cooking lessons is $11,000 (GST inclusive). The cooking lessons will start on 9 May 2021.
• The stand-alone price of the appliances is $33,000 (GST inclusive). The service fee for the appliance is usually $3,300 (GST inclusive), if it is not free. 
• The appliances were delivered on 25 May 2021.
• Delicious Cooking Club paid the full amount on 28 May 2021 for the appliances.
• By 31 May 2021, 8 cooking lessons had been held, and no payment has been made for the cooking lessons. In addition, no free service is performed on the appliances by 31 May 2021.

Required:

Problem 1: With reference to AASB 15 Revenue from Contracts with Customers, apply the five-step process for revenue recognition in regard to the contract with Delicious Cooking Club. Please list and explain each of the five steps and show any calculations.