1(a) Five step model

(i) Identify the contract with a customer

Customer has entered into a contract to pay twenty-four months fees to Teaberry Bhd. S

(ii) Identify the separate performance obligations in the contract

In this case, there are 2 distinct perofrmance obligations :

(I) The obligation to deliver a handest

(II) The obligation to provide telecommunication and digital services for twenty-four m

(iii) Determine the transaction price

The transaction price is 24 months X RM250 = RM6,000

(iv) Allocate the transaction price to the separate performance obligation in the con
The transaction price is allocated to each separate performance obligation in proportion t
of each performance obligation in the inception of the contract.

Performance Obligation Stand- alone selling price

RM

Handset 2,150

Network Service 4,080

(RM170 X 24 months)

6,230

(v) Recognize revenue when (or as) the entity satisfied a perforance obligation
As each performance obligation to customer is satisfied. Teaberry will recognize revenu

(I) When Teaberry offers a handset to customer, it will recognize a revenue of RM2,070
Because the control of the handset passed to the customer.

(II) When Teaberry provides telecommunication and digital services to customer, Teabe
monthly revenue from which total telecommunication and digital fee of RM3,930 which
RM163.75 (RM3930/24months) is recognized every month for 24 months.
 (b) Journal entries in Teaberry's books:

On 1 July 2021
DR
RM

Trade Receivable (unbilled revenue) 2070

Revenue

(Recognition of revenue from the sale of handset)

On 31 July 2021
(Monthly Payment)
DR
RM

Cash 250
Revenue (RM3930 X 1/24)
Trade Receivable (RM2070 X 1/24)

(Recognition of revenue from montly provision of telecommunication and digital service

(c) SOPL (extract) FTYE 30 Nov 2021

RM
Revenue 2889
{RM163.75 X 5 months) +RM2070}

SOFP (extract) FTYE 30 Nov 2021

RM
Current Asset
Trade Receivable{RM2070- (RM86.25 X 5months)} 1639
nths fees to Teaberry Bhd. So, a contract exist.

services for twenty-four months.

mance obligation in the contract

ce obligation in proportion to the stand alone selling price

% of total Revenue
% RM

34.50% 2,070
2,150/ (2,150 + 4,080) (6000 X 34.5%)

65.50% 3,930
4,080/ (2,150 + 4,080) (6000 X 65.5%)

100% 6,000 (RM250 X 24 months)

perforance obligation
berry will recognize revenue.

gnize a revenue of RM2,070.

services to customer, Teaberry needs to recognize the

gital fee of RM3,930 which is spread over 24 months, so
for 24 months.
 CR
RM

2070

CR
RM

163.75
86.25

unication and digital services and the 'repayment' of handset)