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Orange Airline. Your answers should be whole numbers (no decimal points, no $). What amount of revenue is recognized when the flight occurs? What amount should be allocated to deferred revenue related to the miles?

Orange Airline. Your answers should be whole numbers (no decimal points, no $). What amount of revenue is recognized when the flight occurs? What amount should be allocated to deferred revenue related to the miles?

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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5 6 7 Beginning cash balance 8 Collections: 9 10 Cash collected from customers Total cash available 11 12 Less Disbursements: 13 14 15 16 17 18 19 20 21 22 23 24 Financing: 25 Borrowing 26 Amount to Borrow to pay interest on loan 27 Total Borrowings 28 35 Repayment of principal (outflows) 36 37 Interests (outflows) 38 Net Financing (interest and principal) 39 Plus: Minimum cash balance 40 41 Ending Cash Balance 42 43 Short-Term Borrowing Balance 44 Information 45 Minimum Cash Balance 46 Borrowings and Repayment of Principal in Multiples of 47 Interest Rate Monthly Rate 48 49 En Cash paid out for inventory purchases. Cash paid for S & A expenses Cash paid for equipment purchases Cash paid for dividends Total disbursements Minimum cash balance Total Cash Needs Y Excess (deficiency) of cash available over needs ? ? ? ? ? ? October $42,000 150,500 $192,500 151,758 84,600 10,000 0 $246,358 10,000 $256,358 ($63,858) $64,000 0 $64,000 $10,000 1,000 12% 0.01
Transcribed Image Text:5 6 7 Beginning cash balance 8 Collections: 9 10 Cash collected from customers Total cash available 11 12 Less Disbursements: 13 14 15 16 17 18 19 20 21 22 23 24 Financing: 25 Borrowing 26 Amount to Borrow to pay interest on loan 27 Total Borrowings 28 35 Repayment of principal (outflows) 36 37 Interests (outflows) 38 Net Financing (interest and principal) 39 Plus: Minimum cash balance 40 41 Ending Cash Balance 42 43 Short-Term Borrowing Balance 44 Information 45 Minimum Cash Balance 46 Borrowings and Repayment of Principal in Multiples of 47 Interest Rate Monthly Rate 48 49 En Cash paid out for inventory purchases. Cash paid for S & A expenses Cash paid for equipment purchases Cash paid for dividends Total disbursements Minimum cash balance Total Cash Needs Y Excess (deficiency) of cash available over needs ? ? ? ? ? ? October $42,000 150,500 $192,500 151,758 84,600 10,000 0 $246,358 10,000 $256,358 ($63,858) $64,000 0 $64,000 $10,000 1,000 12% 0.01
Orange Airline has a frequent flyer program that rewards customers with frequent flyer miles based on amounts paid for flights. A customer purchases a ticket for $400 and also earns 2,000 miles based on the price of the ticket. Miles are redeemable at a rate of 20 miles for $1 ($0.05 per mile). The miles may only be redeemed for flights with Orange Airline. Your answers should be whole numbers (no decimal points, no $). What amount of revenue is recognized when the flight occurs? What amount should be allocated to deferred revenue related to the miles?
Transcribed Image Text:Orange Airline has a frequent flyer program that rewards customers with frequent flyer miles based on amounts paid for flights. A customer purchases a ticket for $400 and also earns 2,000 miles based on the price of the ticket. Miles are redeemable at a rate of 20 miles for $1 ($0.05 per mile). The miles may only be redeemed for flights with Orange Airline. Your answers should be whole numbers (no decimal points, no $). What amount of revenue is recognized when the flight occurs? What amount should be allocated to deferred revenue related to the miles?
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