Question
In: Accounting
Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts...
Clarks Inc., a shoe retailer, sells boots in different styles.
In early November the company starts selling “SunBoots” to
customers for $65 per pair. When a customer purchases a pair of
SunBoots, Clarks also gives the customer a 30% discount coupon for
any additional future purchases made in the next 30 days. Customers
can’t obtain the discount coupon otherwise. Clarks anticipates that
approximately 20% of customers will utilize the coupon, and that on
average those customers will purchase additional goods that
normally sell for $110.
Required:
1. How many performance obligations are in a
contract to buy a pair of SunBoots?
2. Prepare a journal entry to record revenue for
the sale of 1,500 pairs of SunBoots, assuming that Clarks uses the
residual method to estimate the stand-alone selling price of
SunBoots sold without the discount coupon.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Clarks Inc., a shoe retailer, sells boots in different styles.
In early November the company starts selling “SunBoots” to
customers for $70 per pair. When a customer purchases a pair of
SunBoots, Clarks also gives the customer a 20% discount coupon for
any additional future purchases made in the next 30 days. Customers
can’t obtain the discount coupon otherwise. Clarks anticipates that
approximately 10% of customers will utilize the coupon, and that on
average those customers will purchase additional goods...
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