The direct-mail marketing company ABG buys a customer list for € 5.000 (e.g. a list of personal and other data of women who gave birth in the ABG Maternity Hospital in March 20X0). ABG expects that the catalog will be usable for 3 years, but the greatest return on the catalog will be in the first year after acquisition. How will the €5,000 be recognised and how will you deal with it after the initial recognition?
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The direct-mail marketing company ABG buys a customer list for € 5.000 (e.g. a list of personal and other data of women who gave birth in the ABG Maternity Hospital in March 20X0). ABG expects that the catalog will be usable for 3 years, but the greatest return on the catalog will be in the first year after acquisition. How will the €5,000 be recognised and how will you deal with it after the initial recognition?
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- Rotomola Inc. sells 50 tablet devices for € 200 each (total: € 10,000). Customers can return undamaged devices within 30 days for a full cash refund. The cost of each device is € 150. Based on its experience, Rotomola estimates that 3 tablets will be returned (“most likely approach”). What journal entries should Rotomola record on transfer of the products?You sell $5 million dollars' worth of delivery trucks to Walmart on account and offer them a 2% discount if they pay within 15 days, with the invoice due after 45 days (2/15, n/45). Unfortunately, Walmart returns all of the trucks after one week because they discover that the model you sold them is not approved for use in California. Which of the following is part of the correct journal entry to make at the time that Walmart returns the trucks? DEBIT to Sales Returns of $5 million CREDIT to Sales Discount of $100,000 CREDIT to Accounts Receivable of $4.9 million CREDIT to Sales Revenue of $5 millionUse the information for the next three (3) questions. Seva Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date.During 2020, the customer earned 60,000 points. Management expects that 100% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price.On December 31, 2020, 28,800 points have been redeemed in exchange for purchases.In 2021, the management revised expectations and now expects 90% of the points to be redeemed. 9,000 points were redeemed during the year.How much of the sales should be allocated to the award points? How much should be recognized as revenue for 2020? How much should be recognized as revenue for 2021?
- Beginning the year 2020, the ABC Company began marketing its phone. Each phone sells for P50,000. To promote and expedite sales of this product, the management of ABC is offering one proof of purchase seal for a special slim transparent case to each customer for every unit of Samsung phone. ABC estimates that out of the units sold during 2020, only 60% of the proof of purchase seals will be redeemed. Sales of phone during 2021 totaled P50 million. For that year, 625 special slim transparent cases were purchased by the company at a total cost of P750,000. These 625 special slim transparent cases have a total sales value of P1,250,000. A total of 320 special slim transparent cases were distributed to customers during the year 2020. How much is the unearned revenue for unredeemed premiums reported in ABC's December 31, 2020 statement of financial position?Please show the solution in good accounting form. Thank you! Dominic Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and remittance of ₱25. The distribution cost is ₱10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, ₱50 per unit ₱ 2,500,000 ₱ 2,875,000 Towel purchases, ₱90 per unit ₱ 337,500 ₱ 360,000 Number of box tops returned 22,500 38,550 Requirements: 1. Compute for the premiums (as an asset) amount for the year ended:A. December 31, 2020B. December 31, 2021 2. Compute for the premiums expense for the year ended:A. December 31, 2020B. December 31, 2021 3. Compute for the premium liability for the year ended:A. December 31, 2020B. December 31, 2021 4. How much net cash did the entity receive (give) with regards to the…can you please explain how to recognize the revenue if you have the information below using IFRS The A company sells copy machine at a sales price of JPY1,500,000 per unit. The salesprice includes delivery and installation. It also gives a maintenance service (6 years) in which atechnician checks to make sure that the machine is working properly with a price of JPY500,000(one-time prepayment).The A company has started a promotion campaign in which the maintenance service (6years) will be offered for free to a client that buys a copy machine of JPY 1,728,000.The A company has made a contract to sell a copy machine with the maintenance service(6 years) to B company by JPY 1,728,000.
- You have just purchased new goods worth 10,000 EUR from your supplier. Your supplier offers you to pay within 45 days. If you pay within the first 10 days, you get a discount of 1.3%. You know that he might accept a delay of 2 days, but if you pay later than day 47, you will most likely get an additional fee of 550 EUR. You need your next delivery in 60 days and you know he will not deliver the new goods unless you pay the outstanding invoice. When would you pay? Why? What is the effective interest rate?Please show your solution in good accounting form. Thank you! JINN Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and remittance of ₱25. The distribution cost is ₱10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, ₱50 per unit ₱ 2,500,000 ₱ 2,875,000 Towel purchases, ₱90 per unit ₱ 337,500 ₱ 360,000 Number of box tops returned 22,500 38,550 Requirements: 1. Compute for the premiums (as an asset) amount for the year ended:A. December 31, 2020B. December 31, 2021 2. Compute for the premiums expense for the year ended:A. December 31, 2020B. December 31, 2021 3. Compute for the premium liability for the year ended:A. December 31, 2020B. December 31, 2021 4. How much net cash did the entity receive (give) with regards to the…Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?
- A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: Year 1: $50,000 Year 2: $50,000 Year 3: $50,000 Year 4: $60,000 The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. Based on your above calculations, should they purchase the new piece of equipment? Why? 2. Carl and Melissa have monthly income of $6000. They want to buy a house for $200,000 and make a down payment of $40,000. The monthly payment on a 15-year mortgage will be $2,000 and a 30- year mortgage, the monthly payment will be $1,350. Which of the following would you recommend? Why? A. 15 year option B. 30 year option C. They cannot afford to buy a house at this pointThe average credit card customer for VISA has a customer life of 5 years. It costs the company $51 to acquire a new customer and by year 5 they produce $30, $42, $44, $49, and $55 in customer profit. Compute the lifetime value using a 10% discount rate. The average credit card customer for VISA has a customer life of 5 years. It costs the company $51 to acquire a new customer and by year 5 they produce $30, $42, $44, $49, and $55 in customer profit. AMEX enters the market and the customer lifetime reduces to 3 years. Compute the lifetime value of VISA using a 10% discount rate. The average credit card customer for VISA has a customer life of 5 years. It costs the company $51 to acquire a new customer and by year 5 they produce $30, $42, $44, $49, and $55 in customer profit. AMEX enters the market and expect similar revenues but a retention rate of 75%. Compute the lifetime value of AMEX using a 10% discount rate.Cullumber Bakery began selling gift cards in 2025. Based on industry norms, they expect that 40% of the gift cards will not be redeemed. In 2025, the bakery sold gift cards with a value of $3200. During that period, gift cards with a value of $800 were redeemed. The amount of revenue that Cullumber will recognize in 2025 with regard to the gift cards is $1333 $800 $3200 $1120