Question 1 20 Marks

a) Transaction price is the amount of consideration to which an entity expects to be entitled (1)
in exchange for transferring goods or services to a customer (1) excluding amounts collected
on behalf of third parties (1).

b) Transaction price = N$450,000 – (N$450,000*10%) (1)

= N$405,000 (1)

Debit Credit
1 January 2019
Accounts receivable 405,000 1
Revenue from contracts 405,000 1

31 January 2019
Bank 405,000 1
Accounts receivable 405,000 1

c) Transaction price n = 2 (1)

i = 10 (1)
FV = (450,000 – 26,500) = 423,500 (1)
Comp PV = N$350,000

Debit Credit
1 January 2019
Accounts receivable 350,000 1
Revenue from contracts 350,000 1

31 December 2019
Accounts receivable (350,000 x 10%) 35,000 1
Revenue from interest 35,000 1

31 December 2020
Accounts receivable (385,000 x 10%) 38,500 1
Revenue from interest 38,500 1

31 December 2020
Bank 423,500 1
Accounts receivable 423,500 1