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Hamilton provides internet and website support services to its customers. On 1 May 20X7, Hamilton agreed a three-year support service agreement with a customer at a total price of $2,250. How much revenue can be recognised from this transaction for the year ended 31 March 20X7?
Sir, i think something wrong with this question..Because agreement starts on 1 May 20X7, but they ask revenue for the year ended 31 March 20X7..It is impossible..If i think wrong pls help me to solve this question, thanks in advance 🙂If you have copied it all correctly, then the revenue to be recognised is zero 🙂
If is a question from th current edition of the BPP Revision Kit then tell me which one so that I can check the wording myself.
Yes, i have copied it all correctly 🙂 it isn’t from BPP
Correct answer is 250$..Explanation as follows:
Total revenue from the servicing agreement 2250
Therefore, revenue per annum is 2250/3=750
Revenue for period 1 September-31December 20X7 is 4/12×750=250
They ask for the period ended 31 March 20X7, but explanation is relating to the period 1Sept-31Dec 20X7 🙂They have obviously printed all of the dates wrong in the question!!
I hope it wasn’t in one of the other ACCA approved publishers books 🙂
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