Orange Incorporated offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $168, but Orange offers it for $129 when purchased along with an ofhone Orange anticipates a 75% chance that a customer will purchase the extended warranty along with the ophone Assume Orange sells to 1000 oPhones with the extended wananty discount offer What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts Mutiple Choice $39.000 129,250

Orange Incorporated offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $168, but Orange offers it for $129 when purchased along with an ofhone Orange anticipates a 75% chance that a customer will purchase the extended warranty along with the ophone Assume Orange sells to 1000 oPhones with the extended wananty discount offer What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts Mutiple Choice $39.000 129,250

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 10RE

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Orange Inc. offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $132, but Orange offers it for $111 when purchased along with an oPhone. Orange anticipates a 80% chance that a customer will purchase the extended warranty along with the oPhone. Assume Orange sells to 1,000 oPhones with the extended warranty discount offer. What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts? Multiple Choice $111,000 $16,800 $0 $21,000
why total stand alone price = estmimated warranty units??? when solving : Orange Inc. offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $132, but Orange offers it for $111 when purchased along with an oPhone. Orange anticipates a 80% chance that a customer will purchase the extended warranty along with the oPhone. Assume Orange sells to 1,000 oPhones with the extended warranty discount offer. What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts? Multiple Choice $111,000 $16,800 $0 $21,000
Creative Computing sells a tablet computer called the Protab. The $740 sales price of a Protab Package includes the following: One Protab computer. A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. A coupon to purchase a Creative Probook e-book reader for $225, a price that represents a 40% discount from the regular Probook price of $375. It is expected that 20% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $70. Customers can buy the extended warranty for $100 at other times if they do not use the $70 coupon. Creative estimates that 40% of customers will purchase an extended warranty. Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $720.…
Circuit Fitness (CF) sells treadmills and other related exercise equipment. CF offers customers the following purchase options: 1) purchase a treadmill including a one year basic warranty or 2) purchase a treadmill including the one year basic warranty and an extended 2 year warranty (total of 3 years for warranty coverage). The standalone pricing of the treadmill with the base one year warranty is $1,400 and the standalone pricing of the extended two years warranty is $250. Assume on October 1st, 2021 CF entered into a contract with a customer to sell one treadmill with the extended two year warranty for a total sales price of $1,600. CF receives payment from the customer for the treadmill with an extended two year warranty on October 4th, 2021. The treadmill is delivered by CF on October 8th, 2021. The warranty is initiated at that time as well by CF. Circuit Fitness’s fiscal year is January 1- December 31. Apply the requirements of ASC 606; Revenue From Contracts with…
Creative Computing sells a tablet computer called the Protab. The $740 sales price of a Protab Package includes the following: One Protab computer. A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. A coupon to purchase a Creative Probook e-book reader for $225, a price that represents a 40% discount from the regular Probook price of $375. It is expected that 20% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $70. Customers can buy the extended warranty for $100 at other times if they do not use the $70 coupon. Creative estimates that 40% of customers will purchase an extended warranty. Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $720.
Blast sells portable CD players and each unit carries a one-year replacement warranty. The cost of repair defects under the warranty is estimated at 10% of the sales price. During May, Blast sells 650 portable CD players for $50 each. For what amount in May would Blast debit Product Warranty Expense? Select one: a. $3,250 b. $1,625 c. $650 d. $1,300
A new product introduced by Reyes Promotions carries a two-year warranty against defects. The estimated warranty costs related to peso sales are as follows: Year of sale.. .3% Year after sale..... .5% Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales 800,000 1,000,000 Expenditures 12,000 70,000 2020 2021 11. How much is the warranty expense in 2021? 12. How much is the estimated liability as of December 31, 2021? Assume the 2020 warranty did not yet expire.
Washington Products offers credit terms of 3/10, n/45. Which of the following statementsis correct?a. The customer can take a 3% discount if the bill is paid within 45 days of the invoice date.b. The total amount of the invoice must be paid within 10 days of the invoice date.c. A discount of 3% can be taken if the invoice is paid within 10 days of the invoice date.d. No discount is offered for early payment.
BTS Music Shop carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. BTS uses two sales promotions techniques – warranties and premiums – to attract customers.Musical instruments and sound equipment are sold with one year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience is 2% of sales. The premium is offered on the recorded and sheet music. Customers may exchange 2,000 coupons and P200 for a Bluetooth speaker. BTS pays P320 for each speaker and estimates that 60% of the coupons given to customers will be redeemed. BTS’s total sales for 2019 were P72, 000,000 – P57, 000,000 from musical instruments and sound reproduction equipment and P15, 000,000 from recorded music and sheet. Replacement parts and labor for warranty work totalled P1, 640,000 during 2019. A total of 65,000 Bluetooth speakers used in the premium program were purchased during the year and there were P12, 000,000…
SM Food Company distributes to consumers coupons which may be presented (on or before a stated expiration date) to grocers for discounts on certain products of SM. The grocers are reimbursed when they send the coupons to SM. In SM's experience, 50% of such coupons are redeemed, and generally one month elapses between the date a grocer receives a coupon from a consumer and the date SM receives it. During 2022, SM issued two separate series of coupons as follows (see attached image). The only journal entries to date recorded debits to coupon expense and credits to cash of P536,000. The December 31, 2022 Statement of Financial Position should include a liability for unredeemed coupons of ____________.
The credit terms offered to a customer by a business firm are 2/10, n/30, which means that the customer must pay the bill within 10 days. the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date. the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date. two sales returns can be made within 10 days of the invoice date and no returns thereafter.
ABC sells products to customers with a warranty. Customers can return the products to ABC for a free replacement within 90 days of purchase. During April 2022, ABC sold 1,500 products to customers. During May, ABC sold 1,800 products to customers. Based on past sales, ABC estimates that 5% of all products sold will be returned for a free replacement. The products cost ABC $20 to produce and they are sold for $35 per item. During April, 100 products were returned and during May, 120 items were returned. As of March 31, 2022, ABC's Warranty Liability had a credit balance of $12,000. If ABC had an inventory balance of $80,000 on March 31, 2022, what should the inventory balance be on April 30, 2022? No purchases of inventory were made during April or May, 2022. Please enter all amounts as a positive number with no dollar signs or commas. For example, if the answer is $2,100, enter 2100. THE ANSWER IS NOT : 49800 , 30000 , 14880 , 48000