Problem 6. Use the following information for the next two questions: DISCALCED BAREFOOTED NAKASAKASAKA Supermarket, Inc. awards customers loyalty points for their purchases. A customer is entitled to one point for every P 400 purchase. The points accumulated may be redeemed for awards in the form of appliances, electronics, groceries and other household items. DISCALCED estimates the stand-alone selling price of each point at P 4.00. During the period, DISCALCED made total sales of P 40M to cardholders. 1. How much sales revenue is recognized? a) 400,000 b) 40,000,000 c) 39,600,000 d) 0 2. How much is the deferred revenue from loyalty points? a) 400,000 b) 40,000,000 c) 39,600,000 d) 0

Problem 6. Use the following information for the next two questions: DISCALCED BAREFOOTED NAKASAKASAKA Supermarket, Inc. awards customers loyalty points for their purchases. A customer is entitled to one point for every P 400 purchase. The points accumulated may be redeemed for awards in the form of appliances, electronics, groceries and other household items. DISCALCED estimates the stand-alone selling price of each point at P 4.00. During the period, DISCALCED made total sales of P 40M to cardholders. 1. How much sales revenue is recognized? a) 400,000 b) 40,000,000 c) 39,600,000 d) 0 2. How much is the deferred revenue from loyalty points? a) 400,000 b) 40,000,000 c) 39,600,000 d) 0

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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Maximum Inc. (retailer) has a loyalty program that rewards its customers one point per $1 spent. Points are redeemable for $0.20 off future purchases. A customer purchases products (cost of $280) for cash at the usual selling price of $400 and earns 400 points redeemable for $80 off future purchases of goods or services. The retailer expects redemption of 360 points or 90% of points earned. a.) How should the transaction price be allocated among the performance obligation(s)?Note: Round each allocated transaction price in the table below to the nearest dollar. b. Prepare Maximum’s journal entry to record the $400 sale to the customer where the customer earned 400 loyalty points.
If Abby INC sells items to a customer who uses a credit card for $1100 and there is a credit card fee of 1.5% Abby will record an : ______ Round your final answer to the nearest dollar A. DEBIT TO ACCOUNT RECIEABLE FOR $1083 B. Credit to sales revenue for $1083 C. debit to sales expense for $17 D. Debit to credit card discount expense for $17
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4. Review the following sales transactions for Birdy Birdhouses and record any required joumal entries. Birdy Birdhouses sells 20 birdhouses to customer Julia Brand at a price of $70 each in exchange for cash. The cost to Birdy is $46 per birdhouse. Birdy Birdhouses sells 30 birdhouses to customer Julia Brand at a price of $68 each on credit The cost of sale for Birdy is $44 per birdhouse. Terms of the sale are 2/10, n/30, invoice date August 12. Julia discovers 6 of the birdhouses are slightly damaged from the August 10 purchase and returns them to Birdy for a full refund Julia also discovers that 10 of Aug. 10 Aug. 12 Aug. 14 the birdhouses from the August 12 purchase are painted the wrong color but keeps them since Birdy granted an allowance of $24 per birdhouse. Julia Aug. 20 her account in full from the August 12 purchase, less any returns, pays allowances, and or discounts.
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Allocating Transaction Price to Performance Obligations and Recording Sales Maximum Inc. (retailer) has a loyalty program that rewards its customers one point per $1 spent. Points are redeemable for $0.20 off future purchases. A customer purchases products (cost of $196) for cash at the usual selling price of $280 and earns 280 points redeemable for $56 off future purchases of goods or services. The retailer expects redemption of 252 points or 90% of points earned. Required a. How should the transaction price be allocated among the performance obligation(s)? *Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Performance Obligations Product purchase s Loyalty rewards Total Transaction Price as stated Account Name To record sale of product. 280 ✔ S To record cost of sale of product. 280 S b. Prepare Maximum's journal entry to record the $280 sale to the customer and the cost of that sale where the customer earned 280 loyalty points. *Note: If a…
Gordon's Grocers purchases bread from Buddy’s Bread Company at $1.45 per loaf. Gordon's recently engaged in a customer service contract with Buddy's to purchase 20,000 loaves of Buddy's bread. Buddy offered credit to Gordon's at terms of 2/10, n/30. Buddy expects Gordon to pay within the discount period. Required: Question Content Area Prepare the journal entry to record the sale using the net method Hint: In calculating your answer, use one minus the discount rate (eg. 1 - 0.02 = .98)
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2. Review the following sales transactions for Birdy Birdhouses and record : required journal entries. any Aug. 10 Birdy Birdhouses sells 20 birdhouses to customer Julia Brand at a price of $70 each in exchange for cash. The cost to Birdy is $46 per birdhouse. Aug. 12 Birdy Birdhouses sells 30 birdhouses to customer Julia Brand at a price of $68 each on credit. The cost of sale for Birdy is $44 per birdhouse. Terms of the sale are 2/10, n/30, invoice date August 12. Aug. 14 Julia discovers 6 of the birdhouses are slightly damaged from the August 10 purchase and returns them to Birdy for a full refund. Julia also discovers that 10 of the birdhouses from the August 12 purchase are painted the wrong color but keeps them since Birdy granted an allowance of $24 per birdhouse. Aug. 20 Julia pays her account in full from the August 12 purchase, less any returns, allowances, and/or discounts.
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Saved Help The following transactions were selected from among those completed by Hailey Retailers in the current year: Nov. 20 Sold two items of merchandise to Customer B, who charged the $570 (total) sales price on her Visa credit card. Visa charges Hailey a 2 percent credit card fee. 25 Sold 14 items of merchandise to Customer C at an invoice price of $3,800 (total); terms 2/10, n/30. 28 Sold 12 identical items of merchandise to Customer D at an invoice price of $7,320 (total); terms 2/10, n/30. 30 Customer D returned one of the items purchased on the 28th; the item was defective and credit was given to the customer. Dec. 06 Customer D paid the account balance in full. 30 Customer C paid in full for the invoice of November 25. Required: 1. Prepare the appropriate journal entry for each of these transactions. Do not record cost of goods sold. 2. Compute Net Sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute Net Sales. (Round your…