Question

In: Accounting

On 31 January 2019, Ben Chan (Ben) entered into a contract of a 6-month 5G Data...

On 31 January 2019, Ben Chan (Ben) entered into a contract of a 6-month 5G Data and Wifi Plan with the Entity A, the largest local telecom service supplier in Hong Kong.

The contract terms are listed as below:

  1. The fixed monthly fee is $800 per month; and

  2. At the inception stage of the plan, a free X-Phone is given to Ben for inviting him

    to join the service plan. The 5G Data Service and the Wifi Service will start on 1 February 2019 and will end on 31 July 2019. Ben transferred cash from his bank account on every month end starting from 28 February 2019.

The stand-alone selling prices of the X-Phone, the 5G Data Service and the Wifi Service are $2,000, $400 per month and $100 per month respectively. The cost of the X-Phone is $1,450. The X-Phone, the 5G Data Service, and the Wifi Service are three separate performance obligations.

The perpetual inventory system is adopted.

REQUIRED:

According to relevant accounting standards, provide the journal entries of Entity A on 31 January 2019, 1 March 2019 and 30 April 2019 respectively.

*Please provide all the steps of calculation if any

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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