Clarks Inc., a shoe retaller, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for $70 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any addition 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 retaller, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for $70 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any addition 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Clarks Inc., a shoe retaller, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for
$70 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.
Complete this question by entering your answers in the tabs below.
Required 1
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. (If no entry is required for a transaction/event, select "No journal entry required"
in the first account field.)
Required 2
View transaction list
Journal entry worksheet
< 1
Record the revenue for the sale of 1,000 pairs of SunBoots.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Transcribed Image Text:Clarks Inc., a shoe retaller, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for
$70 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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
How many performance obligations are in a contract to buy a pair of SunBoots?
Number of performance obligations
Required 1
Required >
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