EXAM PRACTICE 4 UCANCOOK Ltd provides cooking classes and also sells related products. The cooking classes provided range from beginners' classes (that are around hour long) to expert master chef classes (that can be up to 3 hours long). Customers need to book into classes on-line (at least 24 hours prior to the starting time of the class). Required a) Explain whether the accountant is correct (whether the $120 paid for the booking card can be recognised as revenue on 1 August 2024). If the accountant is incorrect explain when the $120 paid for the card should be recognised as revenue and why. (You need to give reasons and explain in your own words) 10 11 12 14 15 16 Part 1 On 1 August 2024 Tony signed a 6-month contract with UCANCOOK Ltd and paid $280.00 in cash. This payment allowed Tony to book into 8 hours of cooking classes for the month ending 31 August 2024. The payment included a one-off fee for a card of $120. Tony received a card, which had a password that allowed him to access the UCANCOOK booking site and book into specific cooking classes. Under the contract Tony will be required to make a further 5 payments of $160 per month (payable at the beginning of each month starting on 1 September 2024). The accountant for UCANCOOK Ltd has recognised the $120 paid for the booking card as revenue on the 1 August 2024. 20 27 31