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Determine the revenue to be recognized

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Reference no: EM133020346

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Q1. AAA Company entered into a contract with a private company on July 1, 2020. The private company subscribes for a monthly plan for 12 months and in return, the private company receives free handset. The private company will pay monthly fee of P1,600 and it gets the handset immediately after signing the contract. AAA sells the same handset for P4,800 and the same monthly plans for P1,280 without the handset.

a. Determine the Revenue to be recognized on 2020 and 2021?

b. Determine the Entries to record the transactions for 2020 and 2021?

Q2. BBB Company was organized in 2020. The firm entered into a contract with a private company to do the following: bookkeeping activities, preparation of monthly and annual financial statements and annual tax returns. The annual fee is P100,000 for bookkeeping services, P5,000 for monthly reports and P50,000 for annual report and tax return.

a. Determine the Revenue to be recognized on 2020?

b. Determine the Entries to record the transactions?

Q3. CCC Company sells their air-conditioning units to various customers. In its contract with Makati Hotel, Carrier Philippines promised to deliver 25 split-type  air-conditioning units for a total price of P800,000 by the end of 2020. The contract with Makati Hotel contains a provision for free repairs and maintenance services within 2 years from the date of purchase. All the 25 units were delivered and Makati Hotel paid P800,000.

a. Determine the Revenue to be recognized on 2020?

b. Determine the Entries to record the transactions?

Reference no: EM133020346

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