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Question - MM Pte Ltd sells its X-model piano regularly at $3,600. The cost of the piano to the company is $2,000. During the month of March 20X1, the company had a promotion package and customers who purchased the X-model would be given four free music lessons, to be conducted during the month of April, and two free piano tuning sessions, to be done every six months. The four-music lesson package can be purchased at $240 on its own and the company charges $80 per tuning session.
On 2 March 20X1, a customer, Annie, purchased the X-model from the company and paid the full amount. The piano was delivered on 4 March 20X1.
Explain how MMPL will recognise the revenue arising from Annie's purchase of this promotion package using the five-step model from FRS 115 Revenue from Contracts with Customers.
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