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A New York City daily newspaper called Manhattan Today charges an annual subscription fee of $108. Customers prepay their subscriptions and receive 300 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 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 $100 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 $110 subscription price? 2. How many performance obligations exist in this contract? 3. Prepare the journal entry to recognize sale of 12 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 $108. Customers prepay their subscriptions and receive 300 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 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 $100 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 $110 subscription price? 2. How many performance obligations exist in this contract? 3. Prepare the journal entry to recognize sale of 12 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A New York City daily newspaper called Manhattan Today charges an annual subscription fee of $108. Customers prepay their subscriptions and receive 300 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 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 $100 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 $110 subscription price? 2. How many performance obligations exist in this contract? 3. Prepare the journal entry to recognize sale of 12 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
Transcribed Image Text:A New York City daily newspaper called Manhattan Today charges an annual subscription fee of $108. Customers prepay their subscriptions and receive 300 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 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 $100 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 $110 subscription price? 2. How many performance obligations exist in this contract? 3. Prepare the journal entry to recognize sale of 12 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
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