The Rink offers annual $400 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "40% off a $5 meal" coupons that are edeemable at the Rink's snack bar. The Rink estimates that approximately 75% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 8% because of ongoing promotions. Required: Calculate how much of the transaction price should be allocated to each performance obligation in the contract. Round your answer to 2 decimal places.) Transaction price Meal ce-skating facilities and locker rooms

The Rink offers annual $400 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "40% off a $5 meal" coupons that are edeemable at the Rink's snack bar. The Rink estimates that approximately 75% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 8% because of ongoing promotions. Required: Calculate how much of the transaction price should be allocated to each performance obligation in the contract. Round your answer to 2 decimal places.) Transaction price Meal ce-skating facilities and locker rooms

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 10P

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A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the companyoffered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon toreceive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of acarriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed.Required:1. How much revenue should Manhattan Today recognize upon receipt of the $130 subscription price?2. How many performance obligations exist in this contract?3. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue ordeferred revenue associated with each performance obligation.
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Required: How much revenue should Manhattan Today recognize upon receipt of the $130 subscription price? How many performance obligations exist in this contract? Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation. The correct answer is: DR Cash - $1,300 CR Deferred Revenue - discount coupon $130 CR Deferred Revenue - subscription $1,170 ...but I have no idea how "they" came up with the deferred revenue costs. I've asked my professor, but since it's an online summer course, they're not into…
As part of a promotion campaign, Funzy Cereal includes one coupon in each issue of various national magazines and offers a toy car in exchange for $1.00 and three coupons. The cars cost Funzy $1.50 each. Experience indicates that 4% of the coupons eventually will be redeemed. During the last month of 2021, the first month of the offer, 12 million coupons were distributed and 240,000 of the coupons were redeemed. Funzy recognizes coupon promotion expense in the period coupons are issued. What amount should Funzy report as coupon promotion expense on its income statement for the year ended December 31, 2021?
A New York City daily newspaper called “Manhattan Today” sells annual subscriptions for a fee of $216. To attract more subscribers, the company offered a package to new subscribers. The $210 cost of the package includes: an annual subscription and a coupon for a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $200 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Required: How much revenue should Manhattan Today recognize upon receipt of the $210 subscription price? How many performance obligations exist in this contract? Prepare the journal entry to recognize sale of 15 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
On December 1, 2019, AwakcAllNight Inc. sells 5,000 super caffeinated candy bars to Campus Grocers. The candy bars sell for 3 per bar. In addition, AwakcAllNight pays Campus Grocers a 900placement fee to ensure that its candy bars are always stocked prominently by the cash register. The 900 is paid at the end of each month based on the results of random inspections of Campus Grocers by AwakcAllNight to ensure that the terms of the contract are being followed. Required: 1. Determine the transaction price for Awake AllNights revenue contract. 2. Prepare AwakeAllNights journal entries to recognize sales revenue and pay Campus Grocers the placement fee.
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