Mammoth Publishing, Inc. owns a weekly magazine called "Nova Health," and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called "Fishing & Camping," which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed. Required: (a) How many performance obligations are in a single subscription contract? (b) Prepare the journal entry to account for one new subscription of "Nova Health," clearly identifying the revenue or deferred revenue associated with each performance obligation.

Mammoth Publishing, Inc. owns a weekly magazine called "Nova Health," and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called "Fishing & Camping," which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed. Required: (a) How many performance obligations are in a single subscription contract? (b) Prepare the journal entry to account for one new subscription of "Nova Health," clearly identifying the revenue or deferred revenue associated with each performance obligation.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 10Q

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Mammoth Publishing, Incorporated owns a weekly magazine called “Nova Health,” and sells annual subscriptions for $86. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 30% discount coupon on its other weekly magazine called “Fishing & Camping,” which has a list price of $70 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed.\\n\\nRequired:\\n(a) How many performance obligations are in a single subscription contract?\\n\\n(b) Prepare the journal entry to account for one new subscription of “Nova Health,” clearly identifying the revenue or deferred revenue associated with each performance obligation.
Mammoth Publishing, Inc. owns a weekly magazine called “Nova Health,” and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called “Fishing & Camping,” which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed.Required:(a) How many performance obligations are in a single subscription contract?(b) Prepare the journal entry to account for one new subscription of “Nova Health,” clearly identifying the revenue or deferred revenue associated with each performance obligation. of performance obligations: 2 Journal entry worksheet Note: Enter debits before credits. Transaction General Journal Debit Credit 1
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the companyoffered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon toreceive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of acarriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed.Required:1. How much revenue should Manhattan Today recognize upon receipt of the $130 subscription price?2. How many performance obligations exist in this contract?3. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue ordeferred revenue associated with each performance obligation.
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Required: How much revenue should Manhattan Today recognize upon receipt of the $130 subscription price? How many performance obligations exist in this contract? Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Prepare the journal entry to recognize sale of 10 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation. The correct answer is: DR Cash - $1,300 CR Deferred Revenue - discount coupon $130 CR Deferred Revenue - subscription $1,170 ...but I have no idea how "they" came up with the deferred revenue costs. I've asked my professor, but since it's an online summer course, they're not into…
A New York City daily newspaper called “Manhattan Today” sells annual subscriptions for a fee of $216. To attract more subscribers, the company offered a package to new subscribers. The $210 cost of the package includes: an annual subscription and a coupon for a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $200 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Required: How much revenue should Manhattan Today recognize upon receipt of the $210 subscription price? How many performance obligations exist in this contract? Prepare the journal entry to recognize sale of 15 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.
Sweet Dates Company offers a premium to its customers—a glass bowl (cost to Sweet Dates is $0.90) upon return of 40 coupons. Two coupons are placed in each box of dates sold. The company estimates, on the basis of past experience, that only 70% of the coupons will ever be redeemed. During 2019, 10 million boxes of dates are sold at $0.30 each. Eight million coupons are redeemed during 2019. Sweet Dates purchased 360,000 glass bowls for the plan on January 1, 2019. Required: 1. Prepare the journal entries related to the sale of dates and the premium plan in 2019. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.
Cyma Cola Company sells boxes of Cola for $10 per box. In addition, Cyma Cola offers its customers a drinking mug in exchange for $1 and 10 Cola box tops. The cost of drinking mug is $3, and the company estimates that customers will redeem 60 percent of the box tops. The premium offer began in June 2019. During 2019 Cyma Cola Company purchased 20,000 Drinking Mugs at $2 for each, and sold 300,000 boxes of Cola for $10 per box, and redeemed 60,000 box tops. Compute Premium Liability in 2019.
luna Company sold 700,000 boxes of “puto” mix under a new sales promotional program. Each box contains one coupon, which if submitted with P40, entitles the customer to a kitchen knife. The company pays P60 per knife and P5 for handling and shipping. It estimates that 70% of the coupons will be redeemed, even though only 250,000 coupons had been processed during 2020. How much should luna report as liability for unredeemed coupons at December 31, 2020?
During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the liability for the unredeemed coupons.
During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the premium expense for the year.