ABC co, a telecommunications operator, entered into a contract with XYZ on March 1, 2020

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ABC co, a telecommunications operator, entered into a contract with XYZ on March 1, 2020. In line with the contract, XYZ subscribes for ABC co's monthly plan for 12 months and in return XYZ receives a free Apple iPhone handset from ABC co. XYZ will pay a monthly fee of 1,200. XYZ gets the handset immediately after contract signature. ABC co sells the same handsets for 2,400 and the same monthly plans for 800 per month without handset.

1. On March 31, 2020, the amount of accounts receivable to be recorded is:

a. 960 b. none c. 1,200 d. 9,600

2.On March 1, 2020, the revenue from sales of goods amounted to:

a. 9,600 b. 12, 400 c. none d. 2,880

3. On December 31, 2020, the total revenue amount to: __________________

a. 12,480 b. 960 c. none d. 1,200

4.Timing of the revenue recognition is? __________

a. Network service - point in time and for Apple iphone handset - overtime

b. Network service and apple iphone handset - both overtime

c. Network service- over time and for apple iphone handset- point in time

d. None, since there is no contract

5. On March 1, 2020, the amount of accounts receivable to be recorded is:

a. 2,800 b. 9,600 c. 12,400 d. None

6. How many performance obligations are there?

a. No PO since there is no existing contract

b. 1 PO - Apple iPhone headset

c. 2 PO - network services and apple iPhone handset

d. 1 PO - network services (monthly and installment plan)