IFRS 15 Entity A manufactures and sells electronic goods. One particular product, Product X, is sold with a six-month manufacturer’s warranty. Entity A also offers customers the option to purchase an extended warranty on Product X. Under the extended warranty, Entity A will repair products that become defective within 24 months from the date the manufacturer’s warranty ends. Product X is sold for €640 per unit. A customer can purchase Product X plus the extended warranty at a combined price of €720. Entity A’s financial year ends on 31 December. As at 31 December 20x6, Entity A estimates, based on its past experience and the number of units of Product X sold in 20x6, that costs of €20,000 will be incurred to repair products that become defective within six months of their sale.

Required:

1. Explain how the sale of Product X plus the related warranties should be accounted for in the financial statements of Entity A.

2. IFRS 15 identifies two types of

David burdick is the ceo of acme bubblegum, a successful public company. as one of the cofounders of the company, burdick has enjoyed speaking and writing about the success of acme bubblegum for several years. typically, he speaks at conferences or directly to the press, but recently, he has been blogging about his firm anonymously. specifically, he defended a recent advertising campaign that was unpopular among consumers and pointedly attacked one of acme bubblegum’s competitors. burdick deeply enjoys his anonymous blogging and believes that none of his readers actually know that he works for acme bubblegum.should burdick be allowed to praise his company’s performance anonymously online? should he be allowed to attack his competitors without disclosing his relationship with the company? how would you feel if the ceo of a company at which you shopped was secretly writing criticisms of his or her competition? how would you feel if you knew a writer for your favorite blog was actually closely involved in a company that the blog discussed? 1. define the ethical issue? 2. who are the primary stakeholders? 3. what are the possible alternatives? 4. how could you evaluate the ethical implications of the alternative actions (use appropriate decision rules)? 5. what action would you recommend and why?