Can anyone correct me if I'm trying to explain the answer.....thx~
Q.143
Derringdo Co sells a package which gives customers a free laptop when they sign a two-year contract for the provision of broadband services.
1. The laptop has a stand-alone price of $200 and
2. the broadband contract is for $30 per month.
Required
In accordance with IFRS 15 Revenue from Contracts with Customers, what amount will be recognised as revenue on each package in the first year?
Answer
Stand-alone price
1. Laptop ($200)
2. Broadband [$30 x 24mths = $720 x ($720/$920=78%) = $562]
Since the laptop is free when customer sign a 2-yr contract
so the total package price is $720 only, get the balance amount of Laptop ($720 - $562 = $158)
I feel confuse because I look the marking answer is writing the Laptop (200, 22%, but calculate as 40, not 158)
so I would like to find some clarification at here with tutors.
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BPP Exam Revision Kit 2021 - Derringdo Co Case (Q.143)
5y ago#1Hi,
The total stand along price is $920 and you have identified he 78% correctly meaning that 22% is then attributable to the laptop. This 22% is then applied to the amounts received of $720, which gives the $158. This is recognised at the point in which the laptop changes hands and the remainder of the amounts received spread over the 24 months.
Thanks,
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