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Problem 1: On 1 July 20X7 The Otakamiro Company handed over to a client a new computer system. The contract price for the supply of the system and after sales support for 12 months was ?800,000. Otakamiro estimates the cost of the after-sales support at ?120,000 and it normally marks up such costs by 50% when tendering for support contracts. Under PFRS 15, the revenue Otakamiro should recognize in its financial year ended 31 December 20X7 is
Option 1: 710,000
Option 2: 620,000
Option 3: 800,000
Option 4: Nil
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