Mammoth Publishing, Inc. owns a weekly magazine called "Nova Health," and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called "Fishing & Camping," which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed. Required: (a) How many performance obligations are in a single subscription contract? (b) Prepare the journal entry to account for one new subscription of "Nova Health," clearly identifying the revenue or deferred revenue associated with each performance obligation.
Mammoth Publishing, Inc. owns a weekly magazine called "Nova Health," and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called "Fishing & Camping," which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed. Required: (a) How many performance obligations are in a single subscription contract? (b) Prepare the journal entry to account for one new subscription of "Nova Health," clearly identifying the revenue or deferred revenue associated with each performance obligation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do not give image format
Transcribed Image Text:Required A
Required B
Prepare the journal entry to account for one new subscription of "Nova Health," clearly identifying the revenue or deferred revenue
associated with each performance obligation. (If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Round your answers to 2 decimal places.)
View transaction list
Journal entry worksheet
1
Record the revenue or deferred revenue associated with each performance
obligation.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Cash
Deferred revenue-Fishing & Camping
Deferred revenue-Nova Health
Clear entry
Debit
96.00
Credit
View general journal
Transcribed Image Text:Mammoth Publishing, Inc. owns a weekly magazine called "Nova Health," and sells annual subscriptions for $96. Customers prepay
their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount
coupon on its other weekly magazine called "Fishing & Camping," which has a list price of $84 for an annual subscription. Mammoth
estimates that approximately 10% of the discount coupons will be redeemed.
Required:
(a) How many performance obligations are in a single subscription contract?
(b) Prepare the journal entry to account for one new subscription of "Nova Health," clearly identifying the revenue or deferred revenue
associated with each performance obligation.
Complete this question by entering your answers in the tabs below.
Required A Required B
How many performance obligations are in a single subscription contract?
Number of performance obligations
< Required A
Required B >
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