q .3 , a)

A Ltd sells computer software to B Ltd on 1 Jul 20X8 for 800,000, a price which includes the provision of a support service for 2 years.

A Ltd sells this software to other customers without the support service for 700,000 and has other service contracts providing similar support at a price of 150,000 per annum.

Identify revenue in relation to support service only for the year ended 31 December 20X8 according to IFRS 15 Revenue from Contracts with Customers?

Group of answer choices

240,000

60,000

329,411

120,000

b)

A television manufacturer offers a warranty on its products at no cost to the customer. During the year to 31 December, sales made evenly throughout the year, amounted to 50 million.

Past experience has been that around 10% of items sold are returned for repair under warranty and that this costs, on average, 5% of the sales price.

How should the manufacturer report its obligation for remedying manufactured defects as at 31 December?

Group of answer choices

Provision of 250,000

Provision of 5,000,000

Receivable of 250,000

Provision of 2,500,000