Revenue_Lecture examples workbook_student.pdf

Revenue_Lecture examples workbook_student.pdf - Lecture...

This preview shows page 1 - 6 out of 19 pages.

1 Lecture example 1 Ignore VAT. Automobile (Pty) Ltd is car dealership. Automobile normally sells new cars and maintenance services to customers (together or separately) i.e. a customer can buy a car or maintenance services or both. A customer purchases a new car and a two year maintenance service plan for a total amount (consideration) of R350,000. The cash price of the new car is R330,000. A fair market interest rate of 10% applies. REQUIRED: 1. Identify the performance obligations for Automobile (the dealership) and the customer, per the purchase agreement. 2. ASSUME the customer pays the full purchase price (i.e. R350,000) per the agreement on the transaction date. a) Identify the types of revenue to be recognised from the agreement by Automobile.
Image of page 1

Subscribe to view the full document.