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The Rink offers annual $400 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Em membership also entitles the member to receive ten "35% off a $5 meal" coupons that are redeemable at the Rink's snack b Rink estimates that approximately 80% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 mee would be discounted by 5% because of ongoing promotions. Required: Calculate how much of the transaction price should be allocated to each performance obligation in the contract. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Transaction price Meal Ice-skating facilities and locker rooms

The Rink offers annual $400 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Em membership also entitles the member to receive ten "35% off a $5 meal" coupons that are redeemable at the Rink's snack b Rink estimates that approximately 80% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 mee would be discounted by 5% because of ongoing promotions. Required: Calculate how much of the transaction price should be allocated to each performance obligation in the contract. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Transaction price Meal Ice-skating facilities and locker rooms

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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The Rink offers annual $400 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "35% off a $5 meal" coupons that are redeemable at the Rink's snack bar. The Rink estimates that approximately 80% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 5% because of ongoing promotions. Required: Calculate how much of the transaction price should be allocated to each performance obligation in the contract. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Transaction price Meal Ice-skating facilities and locker rooms
Transcribed Image Text:The Rink offers annual $400 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "35% off a $5 meal" coupons that are redeemable at the Rink's snack bar. The Rink estimates that approximately 80% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 5% because of ongoing promotions. Required: Calculate how much of the transaction price should be allocated to each performance obligation in the contract. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Transaction price Meal Ice-skating facilities and locker rooms
AgriFoods, Incorporated prepares and delivers agricultural products to industrial-scale kitchens and food service providers. One of its key customers is Home Kitchen & Company, which provides cafeteria solutions for corporations and universities. On January 1, 2024, AgriFoods obtained a one-year contract to supply a pre- specified amount of vegetables to Home Kitchen, and received $600,000 in cash. Then, on March 15, AgriFoods hired Home to run one of its employee cafeterias for a period of six months, from April to September, and paid $70,000 in cash. For similar arrangements, Home usually charged $50,000. Required: (a) Prepare the journal entries AgriFoods would record on January 1, 2024 and January 31, 2024 with respect to the sales contract. Assume revenue is accrued on a monthly basis. (b) Prepare the journal entry to account for AgriFoods' purchase of Home's services.
Transcribed Image Text:AgriFoods, Incorporated prepares and delivers agricultural products to industrial-scale kitchens and food service providers. One of its key customers is Home Kitchen & Company, which provides cafeteria solutions for corporations and universities. On January 1, 2024, AgriFoods obtained a one-year contract to supply a pre- specified amount of vegetables to Home Kitchen, and received $600,000 in cash. Then, on March 15, AgriFoods hired Home to run one of its employee cafeterias for a period of six months, from April to September, and paid $70,000 in cash. For similar arrangements, Home usually charged $50,000. Required: (a) Prepare the journal entries AgriFoods would record on January 1, 2024 and January 31, 2024 with respect to the sales contract. Assume revenue is accrued on a monthly basis. (b) Prepare the journal entry to account for AgriFoods' purchase of Home's services.
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