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Topic-Revenue Recognition B. GB Phone offers a bundled service to customers...

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Accounting

Topic-Revenue Recognition
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B. GB Phone offers a bundled service to customers where a customer can get an IPhone 7 Plus and two years of data and telecommunication service which the price of RM1,800 for handset and RM1,440 for telecommunication and data service for 2 years. If payment is made upfront, GB Phone charges a bundled or discount amount of RM2,500. Required: a) How many performance obligations are there in the selling contract between GB Phone and its customer? Briefly explain. b) How much the transaction price will be allocated to the related performance obligations in (a) if customer paid upfront? c) How and when revenue should be recognized by GB Phone? Briefly explain. Show journal entries to recognize revenues by GB Phone. d)

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