Exam 5: Revenue

House Proud Pty Ltd is operating a promotion selling furniture under the following conditions: • Initial deposit of 20% of purchase price. • Immediate delivery of furniture. • Interest rate of 12.5%pa charged on the outstanding balance. • Repayment of the balance (including the interest) over 24 equal monthly installments. • House Proud retains legal title to the furniture until the final monthly payment has been made. House Proud would recognise revenue as follows:

Which of the following items are defined in AASB 118?

The effect that IFRIC Interpretation titled Agreements for the Construction of Real Estate will have the following effect for entities that undertake off-the-plan real estate sales is that:

Which of the following is NOT an example of an agency arrangement where the selling entity would recognise revenue on a net basis?

Easter Pty Ltd operates a facility making chocolate Easter eggs. Easter has a policy that all unsold chocolate eggs can be returned for a full refund within 1 week of Easter Sunday. On 1 March 2014, Easter sold 500 pallets of packaged eggs at $100 per pallet. Historical data indicates that 20% of the stock will be returned for a refund. Within one month of Easter Sunday (by the end of April 2014) 10% of the eggs were retuned for refund. Using the expected sales approach, how much revenue would be recognised by Easter at the end of April 2014?

In terms of revenue related disclosures on the face of the statement of profit or loss and other comprehensive income:

The following information relates to questions TelCo provides a bundled service offering to a customer for $3000 upfront. The services provided are as follows: • Upfront advice • ‘on-call’ advice • Database access for a 2-year period If TelCo were to charge a separate fee for each service if sold separately the fee would be: Up-front advice $200 On-call advice $2600 Database access $800 -The revenue that would be recorded by TelCo at the inception of the agreement is:

When consideration is deferred and there is a below-market rate of interest charged the fair value of the consideration should be determined:

Which of the following events took place in December 2008?

Orange Pty Ltd develops and sells off-the-shelf accounting software packages. The retail price of each package is $399 (GST inclusive). Included with each purchase are "free" upgrades for a period of 12 months after the date of purchase. These upgrades can be purchased separately for $80 (GST inclusive). At the date of purchase of the software package by a customer, Orange should record revenue of: