Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for $65 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any additional future purchases made in the next 30 days. Customers can't obtain the discount coupon otherwise. Clarks anticipates that approximately 20% of customers will utilize the coupon, and that on average those customers will purchase additional goods that normally sell for $100. Required: 1. How many performance obligations are in a contract to buy a pair of SunBoots? 2. Assume Clarks cannot estimate the standalone selling price of a pair of SunBoots sold without a coupon. Prepare a journal entry to record revenue for the sale of 1,000 pairs of SunBoots.

Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for $65 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any additional future purchases made in the next 30 days. Customers can't obtain the discount coupon otherwise. Clarks anticipates that approximately 20% of customers will utilize the coupon, and that on average those customers will purchase additional goods that normally sell for $100. Required: 1. How many performance obligations are in a contract to buy a pair of SunBoots? 2. Assume Clarks cannot estimate the standalone selling price of a pair of SunBoots sold without a coupon. Prepare a journal entry to record revenue for the sale of 1,000 pairs of SunBoots.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Novak Company offers a set of building blocks to customers who send in 3 UPC codes from Novak cereal, along with 60¢. The block sets cost Novak $1.00 each to purchase and 50¢ each to mail to customers. During 2020, Novak sold 1,356,000 boxes of cereal. The company expects 30% of the UPC codes to be sent in. During 2020, 135,600 UPC codes were redeemed. Prepare Novak's December 31, 2020, adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Brandin Grocers gives one loyalty point to its customers for every dollar spent in the store. The loyalty points will not expire. Customers can redeem these points and are eligible to receive a box of cookies if they redeem 100 points. Brandin Grocers purchase these cookie boxes from the baker @ $3 a box. Because the offer is so popular, 98 per cent of the customers redeem their loyalty points to get the box of cookies.In the month of December 20x1, the total sales recorded in the Store were $ 442,000. You are required to calculate the liability amount and provide the necessary entries.
Assume Costco wants to compete with large manufacturers of golf bags. Costco begins selling a new model of golf bag in its stores for $150. The bag comes with a coupon that customers may mail in to receive a free box of one dozen Kirkland (Costco's brand) golf balls. Each dozen golf balls cost Costco $9.50 to produce and $1.50 to mail to the customer. Kirkland estimates that 40% of the customers who buy a golf bag will mail in the coupon for the free golf balls. During the first quarter of 2020 Costco sold 12,000 golf bags. During that time, 1,000 customers mailed in their coupons and Costco sent them their golf balls. What is the rebate expense and liability, respectively, shown on Costco's financial statements at the end of the first quarter of 2020?
Cullumber Publishing Co. publishes college textbooks that are sold to bookstores on the following terms. Each title has a fixed wholesale price, terms f.o.b. shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30% of an order at the retailer's expense. Sales are made only to retailers who have good credit ratings. Past experience indicates that the normal return rate is 12% and the average collection period is 72 days. The company follows IFRS. On August 8, 2020, Cullumber shipped books invoiced at $28,000,000 (cost $22,000,000). Prepare the journal entry to record this transaction, including the expected returns. Cullumber follows ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date August 8, 2020 August 8, 2020 August 8, 2020 Account Titles and Explanation (To record sale on account) (To…
The Junior Achievers Club maintains an inventory of chocolate bars to meet its annual demand for 100,000 bars to service customers. Each bar costs $5.00, and cost per order is $100.00. Carrying costs have been identified as $1.50 per bar. Recently, the supplier has offered the company a 6.5% discount if orders are placed semi-annually. Show all calculations in answering questions below. Required: What will be Achievers Club’s total inventory costs if it utilizes EOQ?
You sell $5 million dollars' worth of delivery trucks to Walmart on account and offer them a 2% discount if they pay within 15 days, with the invoice due after 45 days (2/15, n/45). Unfortunately, Walmart returns all of the trucks after one week because they discover that the model you sold them is not approved for use in California. Which of the following is part of the correct journal entry to make at the time that Walmart returns the trucks? DEBIT to Sales Returns of $5 million CREDIT to Sales Discount of $100,000 CREDIT to Accounts Receivable of $4.9 million CREDIT to Sales Revenue of $5 million
DJC Ltd., which uses IFRS, operates a coffee shop and began a promotion to increase the sales of its dark roast coffee in December 20X1. Every time that a customer buys a cup of this type of coffee for $2.00 each in December, the customer gets a coupon for 1 free mini cookie that usually sells for $.40 each and costs the company $.20 to produce. Customers cannot use or redeem the coupons until January 20X2. In December 20X1, the company sold 2,800 cups of dark roast coffee. Management expects customers will redeem 90% of the coupons based on many promotions like this that the company has had in the past. In the blank box below, please provide the amount asked for (when entering amounts please do not use commas, negative signs or dollar signs or cents - please round your answer to the nearest dollar). Blank 1: The sales revenue for the dark roast coffee in the month of December 20X1.
Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: E (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. ..... Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Sacco Industries Direct Materials Budget - X For the Months of January through March Data table January February March Quarter Units to be produced 5,600 4,800 4,200 14,600 Stuffed animals to be…
Account Titles and Explanation Debit Credit (To record the pemium inventory) (To record the sales) (To record the expense associated with the sale) (To record the premium liability)