Victoria Company sells bedsheets for P3,000 per set. There is a promotion wherein if a customer buys 4 sets in a single transaction, the customer receives a coupon for one additional set for free. Customers should go to the entity's website, fill out a request form, input the coupon number and submit online before the expiration date. It is expected that 80% of the coupons will be redeemed. During 2021, the entity sold 1,000 sets at P3,000 per set or P3,000,000. During 2022, the entity delivered 75 free additional sets. Required: 1. Compute the stand-alone price of the coupons. 2. Allocate the transaction price to the products sold and the coupons. 3. Prepare journal entries for 2021 and 2022. 4. Compute the deferred revenue from coupons on December 31, 2022.

Victoria Company sells bedsheets for P3,000 per set. There is a promotion wherein if a customer buys 4 sets in a single transaction, the customer receives a coupon for one additional set for free. Customers should go to the entity's website, fill out a request form, input the coupon number and submit online before the expiration date. It is expected that 80% of the coupons will be redeemed. During 2021, the entity sold 1,000 sets at P3,000 per set or P3,000,000. During 2022, the entity delivered 75 free additional sets. Required: 1. Compute the stand-alone price of the coupons. 2. Allocate the transaction price to the products sold and the coupons. 3. Prepare journal entries for 2021 and 2022. 4. Compute the deferred revenue from coupons on December 31, 2022.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter13: Other Financing Alternatives

Section: Chapter Questions

Problem 1fM

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Victoria Company sells bedsheets for P3,000 per set. There is a promotion wherein if a customer buys 4 sets in a single transaction, the customer receives a coupon for one additional set for free. Customers should go to the entity's website, fill out a request form, input the coupon number and submit online before the expiration date. It is expected that 80% of the coupons will be redeemed. During 2022, the entity sold 1,000 sets at P3,000 per set or P3,000,000. During 2023, the entity delivered 75 free additional sets. Compute the deferred revenue from coupons on December 31, 2023.
Anton Company sells one dozen doughnuts for P500 per box. There is a promotion wherein if a customer buys 3 boxes in a single transaction, a customer received a coupon for one additional box for free. Customers can redeem coupons at any time following the month of sale of the 3 boxes before the expiration date. It is expected 60% of the customers will redeem the coupons. During 2022, the entity sold 15,000 boxes at P500 per box or P7,500,000. During 2023, the entity delivered 2,000 free additional boxes to the customers. Required: 1. Compute the stand-alone selling price of the coupons. 2. Allocate the transaction price to the products sold and the coupons. 3. Prepare the journal entry to record the sale of the products and issue of the free product coupons in 2022 4. Prepare the journal entry to record the delivery of 2,000 free additional boxes in 2023.
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XYZ Inc offers a gift set to customers who send in $1.07 plus three coupon codes obtained from the purchase of the company's standard products. That is, a customer purchases three standard products which come with a coupon each, sends everything in along with the cheque for the amount above, and receives the gift set in the mail a few weeks later. During the year, the company acquired an adequate number of gift sets for $2.55 each using cash to meet the promotion's demand. During the year, the company sold 1,031,460 of its standard products for $4.03 each. The company estimated that 10% of the sales amount received from customers would relate to the gift set to be awarded. The company would expect 33.35% of the coupons to be sent in eventually, and, during the year, 247,550 coupons were redeemed. If the company followed IFRS using the revenue approach, how much promotion expense would be recorded for the year for the redeemed coupons? O a. $122,125 O b. $119,072 $116,018 O d. $125,178…
Lastly the journal entry worksheet is needed Req 2c
(Customer Loyalty Program) Martz Inc. has a customer loyalty program that rewards a customer with 1 customer loyalty point for every $10 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2017, customers purchase products for $300,000 (with a cost of $171,000) and earn 30,000 points redeemable for future purchases. Martz expects 25,000 points to be redeemed. Martz estimates a standalone selling price of $2.50 per point (or $75,000 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Martz concludes that the points are a separate performance obligation.Instructions(a) Determine the transaction price for the product and the customer loyalty points.(b) Prepare the journal entries to record the sale of the product and related points on July 2, 2017.(c) At the end of the first reporting period (July 31, 2017), 10,000 loyalty…
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Park-n-Shop is promoting a deal. For a single purchase of $500, the customer can choose to get a $50 voucher for next purchase as long as the customer posts an advertisement on the Facebook. Under this deal, the customer needs to pay $520 for the current purchase (i.e., if the customer takes the deal, she or he pays $20 more). The fair value of Facebook advertisement is $20 for each post. Required: Prepare journal entries for Park-n-Shop when a customer purchased $500 goods and chose to take this deal. You don’t need to record the inventory-related journal entry
Roswell Company purchasesinventory from Clear Pool Supplies on June 1. The sales terms on the invoice from Clear PoolSupplies are 3/10, n/30. What does this mean? What is Roswell’s potential savings, if any? Howmuch time does the company have to take advantage of these savings?
2. In packages of its products, Monty Inc. includes coupons that may be presented at retail stores to obtain discounts on other Monty products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Monty honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Monty estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Monty during 2025 is as follows. Consumer expiration date Total face amount of coupons issued Total payments to retailers as of 12/31/25 12/31/25 $834,500 350,560 What amount should Monty report as a liability for unredeemed coupons at December 31, 2025? Liability for unredeemed coupons $ 3. Flounder Company sold 666,000 boxes of pie mix under a new sales promotional program. Each box contains one coupon, which submitted with $4.30, entitles the customer to a baking pan. Flounder pays $6.30 per pan and $0.80 for…