Verma, Inc. sells office furniture. In 2021, it sold 200 desks for $500 each. For each desk sold, Verma distributed a 50% discount coupon for purchase of an office chair within one month. Based on historical experience, Verma expects that approximately 20% of the coupons will be utilized. The chairs purchased with the coupons are priced at $150 and normally discounted 10%. What would be the stand-alone sales price used by Verma for the coupon when allocating the $500 transaction price to performance obligations?
Verma, Inc. sells office furniture. In 2021, it sold 200 desks for $500 each. For each desk sold, Verma distributed a 50% discount coupon for purchase of an office chair within one month. Based on historical experience, Verma expects that approximately 20% of the coupons will be utilized. The chairs purchased with the coupons are priced at $150 and normally discounted 10%. What would be the stand-alone sales price used by Verma for the coupon when allocating the $500 transaction price to performance obligations?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Verma, Inc. sells office furniture. In 2021, it sold 200 desks for $500 each. For each desk sold, Verma distributed a 50% discount coupon for purchase of an office
chair within one month. Based on historical experience, Verma expects that approximately 20% of the coupons will be utilized. The chairs purchased with the
coupons are priced at $150 and normally discounted 10%. What would be the stand-alone sales price used by Verma for the coupon when allocating the $500
transaction price to performance obligations?
OA. $0
B. $12
OC. $15
$75
OD.
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