Reference no: EM133117831

Questions -

Q1) HOLA signed a contract to provide office services to TEARS for one year from October 1, 2016 for P500 per month. The contract required TEARS to make a single payment to HOLA for all 12 months at the beginning of the contract. HOLA received P6,000 on October 1, 2016. What amount of revenue should HOLA recognize in its statement of profit and loss for the year ended March 31, 2017?

Q2) DAV received an order to supply a customer with 10,000 units of LAPTOPS every month for two years. The customer had negotiated a low price of P200 per 1,000 units and agreed to pay P12,000 in advance every six months. The customer made the first payment on July 1, 2026 and DAV supplied the LAPTOPS each month from that date. DAV's year end is September 30. In addition to the effect of cash received, what is the effect of this order on DAV's financial statement for the year ended September 30, 2026, in accordance with PFRS 15 Revenue from Contracts with Customers?

A) The amount of to be reflected as Revenue on Income Statement will be?

B) The Asset of Liability to be reflected on Statement of Financial Position will be?

Q3) ACER Company enters into a contract on September 1, 2015 to conduct computer marketing activities on behalf of a customer. The contract has a price of P8,000 and requires ACER Company to contract 10,000 households over a period of six months in order to enquire about buying habits and promote its customer. The customer is invoiced equal amounts three months and six months after the commencement of the contract. By ACER Company's year-end of December 31, 2015, it has contacted 3,500 of the 10,000 customers. What amount does ACER Company recognize in its financial statements in the year ended December 31, 2015?

a) A revenue of P4,000 and a receivable of P4,000

b) A revenue of P4,000 and a contract liability pf P4,000

c) A revenue of P2,800 and a receivable of P4,000 and a contract asset of P1,200

d) A revenue of P2,800 and a receivable of P4,000 and a contract liability of P1,200

Q4) On July 31, Columbia Company contracted to have two products build by DELL Manufacturing for a total of P185,000. The contract specifies that payment will only occur after both products have been transferred to Columbia Company. Columbia determines that the standalone prices are P100,000 for Product 1 and P85,000 for Product 2. On August 1, when Product 1 has been transferred what is the journal entry to record the transaction?

Q5) Laparo, Sagpa and Nawong Company enters into 50 contracts with customers- Wally Batasan, Marga Baan, Rekka Mador, Maldi Tan & Caribel Lo and Brenda Mange. Each contract includes the sale of one product for P120,000. The cost to Laparo, Sagpa and Nawong of each product is P48,000. Cash is received upfront and control of the product transfers on delivery. Customers can return the product within 30 days to receive a full refund. Laparo, Sagpa and Nawong can sell the returned products at a profit. They have significant experience in estimating returns for this product. It estimates that 48 products will not be returned.

A) What is the amount of revenue to be recognized?

B) What is the refund liability to be recognized?

Q6) R Company sells photocopying equipment, has prepared its draft financial statements for the year ended September 30, 20x4. It has included the following transactions in revenue at stated amount. Which of these has been correctly included in revenue according to PFRS 15 Revenue from Contracts with Customers?

a) Sales of P150,000 on September 30, 20x1. The amount invoiced to and received from the customer was P180,000, which includes P30,000 for ongoing servicing work to be done by R over the next two years.

b) Sales proceeds of P20,000 for motor vehicles which were no longer required by R

c) Sales of P200,000 on October 1, 20x3 to an established customer which with the agreement of R will be paid in full on September 30, 20x5. Reklamador has cost of capital 10%.

d) Agency sales P250,000 on which Reklamador is entitled to a commission.