e incentives to customers to buy ham and eggs. Bubble Supermarket offers customers a $3 discount on the purchase of 500g of ham when they buy a box of A-grade eggs at the same time. A box of A-grade eggs normally sells for $15 and the ham is normally selling at $10 per 500g in this supermarket. Mary buys a box of A-grade eggs together with 500g of ham and receives the discount. Bubble Supermarket has early adopted HKFRS 15 Revenue from Contracts with Customers when preparing its financial statements. (a) Comment whether a contract exist between Bubble Supermarket and Mary. Support your argument with the requirements of HKFRS 15 Revenue from Contracts with Customers. (b) A junior accountant suggests that there is one performance obligation in the above sales transaction. Do you agree? Discuss. (c) Determine the transaction price of this contract.
Bubble Supermarket wants to provide incentives to customers to buy ham and eggs. Bubble Supermarket offers customers a $3 discount on the purchase of 500g of ham when they buy a box of A-grade eggs at the same time. A box of A-grade eggs normally sells for $15 and the ham is normally selling at $10 per 500g in this supermarket. Mary buys a box of A-grade eggs together with 500g of ham and receives the discount.
Bubble Supermarket has early adopted HKFRS 15 Revenue from Contracts with Customers when preparing its financial statements.
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(a) Comment whether a contract exist between Bubble Supermarket and Mary. Support your argument with the requirements of HKFRS 15 Revenue from Contracts with Customers.
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(b) A junior accountant suggests that there is one performance obligation in the above sales transaction. Do you agree? Discuss.
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(c) Determine the transaction price of this contract.
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(d) Allocate the transaction price to the performance obligation(s) in this contract using stand-alone selling price approach.
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(e) Explain why accountants prefer to use first-in first-out (FIFO) method than weighted average method in cost controls.
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