Company A provides a bundled service offering to Customer B. It charges Customer B $800,000 for initial connection to its network and two ongoing services - access to the network for 1 year and 'on-call troubleshooting' advice for that year. Customer B pays the $800,000 upfront, on 1 July 2020. Company A determines that, if it were to charge a separate fee for each service if sold separately, the fee would be: Connection fee Access fee Troubleshooting $400,000 $500,000 $400,000 The end of Company A's reporting period is 30 June 2021. Required Prepare the journal entries to record this transaction in accordance with AASB 15 for 1 July 2020 and the year ended 30 June 2021, assuming Company A applies the relative fair value approach. (Show all workings).

Company A provides a bundled service offering to Customer B. It charges Customer B $800,000 for initial connection to its network and two ongoing services - access to the network for 1 year and 'on-call troubleshooting' advice for that year. Customer B pays the $800,000 upfront, on 1 July 2020. Company A determines that, if it were to charge a separate fee for each service if sold separately, the fee would be: Connection fee Access fee Troubleshooting $400,000 $500,000 $400,000 The end of Company A's reporting period is 30 June 2021. Required Prepare the journal entries to record this transaction in accordance with AASB 15 for 1 July 2020 and the year ended 30 June 2021, assuming Company A applies the relative fair value approach. (Show all workings).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Company A provides a bundled service offering to Customer B. It charges Customer B $800,000 for initial connection to its network
and two ongoing services - access to the network for 1 year and 'on-call troubleshooting' advice for that year.
Customer B pays the $800,000 upfront, on 1 July 2020. Company A determines that, if it were to charge a separate fee for each
service if sold separately, the fee would be:
Connection fee
Access fee
Troubleshooting
Paragraph
$400,000
Lato (Recomm... v
$500,000
The end of Company A's reporting period is 30 June 2021.
Required
Prepare the journal entries to record this transaction in accordance with AASB 15 for 1 July 2020 and the year ended 30
June 2021, assuming Company A applies the relative fair value approach. (Show all workings).
$400,000
BI U A/
19px (... ✓
EQ
DC
X
M

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