Problem 1

PC HUB, a computer manufacturer, enters into a contract with AC University to deliver 30 computers for
total price of P600,000 (P20,000 per computer).
Due to necessary preparation works, PC HUB agrees to deliver the computers in 3 separate deliveries during
the forthcoming 3 months (10 computers in each delivery). AC University takes control over the computers
at delivery.
After the first delivery is made, AC University and PC HUB amend the contract. PC HUB will supply 20
additional computers (50 in total).
How should revenue should PC HUB account from this contract for the year ended December 31 if:
• Scenario 1: The price for additional 20 computers was agreed at P388,000, being P19,400 per
computer. PC HUB provided a volume discount of 3% for the additional delivery, which reflects
the normal volume discounts provided in similar contracts with other customers.
• Scenario 2: The price for additional 20 computers was agreed at P280,000, being P14,000 per
computer. PC HUB provided a discount of 30% for the additional delivery because it hopes for the
future cooperation with AC University (nothing even discussed yet).
As of December 31, PC HUB delivered 40 computers (30 as agreed initially and 10 under the contract
amendment).

Problem 2
ABC Construction enters into a contract with a customer to build a warehouse for P100,000 with a
performance bonus of P20,000 that will based on the timing of the completion. The amount of the
performance bonus decreases by P5,000 per week for every week of delay beyond the agreed-upon
completion date. The contract requirements are similar to contracts that ABC has previously performed
and management believes that such experience is predictive for this contract. Management believes that
there is a 60% probability that the contract will be completed by the agreed-upon completion date, a 30%
probability that it will be completed 1 week late, and only a 10% probability that it will be completed 2
weeks late.
How much is the revenue to be recognized if the company opts to determine revenue using the weighted
probability?
How much is the revenue to be recognized if the company opts to determine revenue using the most likely
outcome and management firmly believes that they will meet the deadline and receive the bonus?

Problem 3
Jose enters into a 12-month telecom plan with the local mobile operator ABC on July 1, 20x9. The terms
of plan are as follows:
• Jose’s monthly fixed fee is P1,200.
• Jose receives a free handset at the inception of the plan.
ABC sells the same handsets for P14,000 and the same monthly prepayment plans without handset for
P500/month.
How much revenue should ABC recognize from this plan in line with PFRS 15 for 20x9?

Problem 4
ManyBits is a software company who entered into contract with ABC Co on July 1, 20x9. Under the
contract, ManyBits is obliged to:
• Provide professional services consisting of customization and testing of a software product that
ABC has purchased from a third party.
• Provide post-implementation support for 1 year after the customized software is delivered.
The total contract price is P55,000.
ManyBits assessed its total cost for fulfilling the contract as follows:
• Cost of developers and consultants for customizing and testing the existing software: P43,000;
• Cost of consultants for post-delivery support: P2,000;
 • Total estimated cost of fulfilling the contract: P45,000.
As of December 31, 20x9, ManyBits incurred the following costs of fulfilling the contract:
• Cost of developers and consultants for customizing and testing the software: P12,900.
How should ManyBits recognize revenue from this contract under PFRS 15 assuming that ManbyBits’
normally charges 10% for support services for the package price, no matter the package?

Problem 5
DONG Services operates a website that links experienced consultants with businesses that need consulting
services. The consultants post their rates, qualifications, and references on the website, and DONG receives
25% of the fee paid to the consultants in exchange for identifying potential customers. ROCKSTAR Inc.
contacts DONG and arranges to pay a consultation fee of P15,000 in exchange for a business consulting
services. DONG’s income statement would include the following with respect to this transaction:
A. Revenue of P15,000 C. Revenue of P3,750
B. Revenue of P15,000 and cost of services of D. Revenue of P18,750 and cost of services of
P11, 250 P15,000

Problem 6
On January 1, 20x9, ABC Company enters into a contract to transfer Product One and Product Two to XYZ
Company for P200,000. The contract specifies that payment of Product One will not occur until Product
Two is also delivered. ABC Company determines that the stand-alone prices are P60,000 for product One
and P140,000 for product Two. ABC Company delivers Product One to XYZ Company on February 1,
20x9. Product Two is delivered on March 1, 20x9.

1. On January 1, 20x9, how much is the amount of accounts receivable to be recorded?

A. None C. P140,000
B. P60,000 D. P200,000

2. On February 1, 20x9, how much is the amount of accounts receivable to be recorded?

A. None C. P140,000
B. P60,000 D. P200,000

3. On February 1, 20x9, how much is the amount of revenue to be recorded?

A. None C. P140,000
B. P60,000 D. P200,000

4. On March 1, 20x9, how much is the amount of accounts receivable to be recorded?

A. None C. P140,000
B. P60,000 D. P200,000

5. On March 1, 20x9, how much is the amount of revenue to be recorded?

A. None C. P140,000
B. P60,000 D. P200,000

Problem 7
YSL sold 3,000 boxes of perfumes on January 20x8 at the price of P90 per box. The sales contract offers
a full refund for any product returned within 30 days from the date of purchase. Based on historical
experience, YSL expects that 3% of sales will be returned.

1. How many performance obligations are there in each sale of a box of perfume?
A. None C. 2
B. 1 D. 3
2. How much revenue should YSL recognize in January?
A. Zero C. P261,900
B. P8,100 D. P270,000