Pfrs 15
Pfrs 15
Pfrs 15
PROBLEMS
Problem 1 (Five-step model). Globe, a telecom operator, entered into a contract with Ms. Kim on March 1 ,20x7. In line
with the contract Kim subscribes for Globe’s monthly plan for 12 months and in return Kim receives a free IPhone handset
from Globe. Kim will pay a monthly fee of P1,200. Kim gets the handset immediately after signing the contract.
Globe sells the same handsets for P3,600 and the same monthly plans for P800 per month without handsets.
On January 1, 20x9, C Company enter into a contract to transfer Product X and Product Y to P Co. for P200,000. The
contract specifies that payment of Product X will not occur until Product Y is also delivered. In other words, payment will
1
not occur until both Product X and Product Y are transferred to P. C determines that standalone price are P60,000 for
Product X and P140,000 for Product Y. C delivers Product X to P on February 1, 20x9. On March 1, 20x9 C delivers
Product Y to P.
2
15. ON July 1, 20x5 Ellsbury Inc. enter into a contract to deliver one of its specialty machineries to K Landscaping Co.
The contract requires K to pay the contract price of P2,500 in advance on July 15, 20x5. K pays Ellisbury on July
15, 20x5 and Ellisbury delivers the machinery (with cost of P1,600) on July 31, 20x5. The contract exist on
a. July 1, 20x5 b. July 15, 20x5 c. July 31, 20x5 d. No contract exists
3
Aparri pays Joey & Co all amounts owed. The amount of revenue that Joey & Co should recognize on its sale of
golf clubs to Aparri.
a. Zero b. P199,500 c. P200,000 d. P203,000
A local newspaper called “BSAcsi” charges an annual subscription fee of P1,350. Customer prepay their subscriptions and
receive 260 issues over a year. To attract more subscribers, the company offered new subscribers the ability to pay
P1,300 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through
Rizal Park in a carabao-drawn carriage. The list price of a carriage ride is P1,250 per hour. The company estimates that
approximately 30% of the coupons will be redeemed.
28. How much revenue should BSA recognize upon receipt of P1,300 subscription price?
a. P 0 b. P 10,800 c. P12,500 d. P13,000
29. Based on #29, how many performance obligations exist in this contract?
a. 0 b. 1 c. 2 d. 3
30. The journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue
associated with each performance obligation
a. Cash P13,000 c. Cash P13,000
Deferred revenue - subscription P11,700 Deferred revenue – coupon P13,000
Deferred revenue – coupon 1,300 d. Cash P13,000
b. Cash P13,000 Deferred revenue – subscription P11,700
Deferred revenue – subscription P13,000 Deferred revenue – coupon 1,300