Identifying and Recording Customer Option for Additional Merchandise Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase. There is a limit of one coupon per customer. Pets Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $24. Sales on the first day of the one-week promotional period totaled $240,000 resulting in 2,400 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price. a. Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum discount of 20%. Two performance obligations b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices. •Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Performance Obligations Merchandise Customer option-merchandise credit Cash Account Name $ Deferred Revenue-Merchandise Credit Sales Revenue To record the sale of merchandise. $ To record the cost of sale of merchandise. To receognize revenue. Deferred Revenue-Merchandise Credit Sales Revenue To record the sale of merchandise. Transaction Price as Stated 240,000 To record the cost of sale of merchandise. くくくくくくくく $ 0✔ 240,000 $ くくくく Debit 240,000 8,400 0 0 0 c. Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of $13,800. Record the entry for the redemption of the coupons, ignoring the cost entries. Account Name Debit Credit Debit 0 0 0 0 0 OO Standalone Selling Price 0 240,000 $ 2,240 x 242,240 $ d. If the coupons, instead, offered 20% on future purchases (otherwise, same facts as before), how would the answers change to parts a and b, if at all? Account Name Credit 0 Credit 0✔ 0 x 0x 0x 0 x 0x 0x 0x Total Allocated Transaction Price (rounded) 0x 0 x 179,856 * 179,856 * 359,712 0 x 0x