Account Name Debit Credit 0 0 0 0 0 0 To record the sale of merchandise. To record the cost of sale of merchandise. 0 0 0 0 c. Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of $16,100. Record the entry for the redemption of the coupons, ignoring the cost entries. Account Name To receognize revenue. Debit Credit 0 0 0 0 0 0 d. If the coupons, instead, offered 20% on future purchases (otherwise, same facts as before), how would the answers change to parts a and b, if at all? Account Name To record the sale of merchandise. Debit Credit 0 0 0 0 0 0 0 0 To record the cost of sale of merchandise. Identifying and Recording Customer Option for Additional Merchandise Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase. There is a limit of one coupon per customer. Pets Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $24. Sales on the first day of the one-week promotional period totaled $280,000 resulting in 2,800 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price. a. Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum discount of 20%. One performance obligation b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices. •Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Performance Obligations Merchandise Customer option-merchandise credit Transaction Price as Stated Standalone Selling Price $ 0 $ 0 $ 0 0 $ 0 $ 0 $ Total Allocated Transaction Price (rounded) 0 0 0
Account Name Debit Credit 0 0 0 0 0 0 To record the sale of merchandise. To record the cost of sale of merchandise. 0 0 0 0 c. Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of $16,100. Record the entry for the redemption of the coupons, ignoring the cost entries. Account Name To receognize revenue. Debit Credit 0 0 0 0 0 0 d. If the coupons, instead, offered 20% on future purchases (otherwise, same facts as before), how would the answers change to parts a and b, if at all? Account Name To record the sale of merchandise. Debit Credit 0 0 0 0 0 0 0 0 To record the cost of sale of merchandise. Identifying and Recording Customer Option for Additional Merchandise Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase. There is a limit of one coupon per customer. Pets Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $24. Sales on the first day of the one-week promotional period totaled $280,000 resulting in 2,800 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price. a. Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum discount of 20%. One performance obligation b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices. •Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Performance Obligations Merchandise Customer option-merchandise credit Transaction Price as Stated Standalone Selling Price $ 0 $ 0 $ 0 0 $ 0 $ 0 $ Total Allocated Transaction Price (rounded) 0 0 0
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter8: Revenue Recognition, Receivables, And Advances From Customers
Section: Chapter Questions
Problem 20E
Related questions
Question
Transcribed Image Text:Account Name
Debit
Credit
0
0
0
0
0
0
To record the sale of merchandise.
To record the cost of sale of merchandise.
0
0
0
0
c. Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of
$16,100. Record the entry for the redemption of the coupons, ignoring the cost entries.
Account Name
To receognize revenue.
Debit
Credit
0
0
0
0
0
0
d. If the coupons, instead, offered 20% on future purchases (otherwise, same facts as before), how
would the answers change to parts a and b, if at all?
Account Name
To record the sale of merchandise.
Debit
Credit
0
0
0
0
0
0
0
0
To record the cost of sale of merchandise.
Transcribed Image Text:Identifying and Recording Customer Option for Additional Merchandise
Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon
for a 35% discount on a future purchase. There is a limit of one coupon per customer. Pets Inc.
estimates that 28% of customers receiving the coupon will redeem the coupon on an average
purchase of $24. Sales on the first day of the one-week promotional period totaled $280,000 resulting
in 2,800 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price.
a. Determine how many performance obligations are included in a sales transaction during the
advertising promotion program. Assume that coupons readily available to the public online or in
company fliers have a maximum discount of 20%.
One performance obligation
b. Record the journal entry to record revenue in the first day of the promotion period using the
relative percentages to allocate standalone selling prices.
•Note: Carry all decimals in calculations; round the final answer to the nearest dollar.
Performance
Obligations
Merchandise
Customer option-merchandise credit
Transaction
Price
as Stated
Standalone
Selling
Price
$
0 $
0 $
0
0
$
0 $
0 $
Total Allocated
Transaction Price
(rounded)
0
0
0
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