Gyarados Pools is offering a limited-time special. Join their pool for $150 which is half off the normal initiation fee of $300. In addition to the initiation fee, Gyarados Pools requires members to pay a $25 monthly fee to maintain their membership (due on the first day of the month for which access will be provided). The typical length of membership is 10 months. Question: If a customer signs the contract and pays $150 on September 10th, how many performance obligations exist related to this contract?
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- Nate Beggs signs a 1-year contract with Bramble Video. The terms of the contract are that Nate is required to pay a nonrefundable initiation fee of $108. No annual membership fee is charged in the first year. After the first year, membership can be renewed by paying an annual membership fee of $4 per month. Bramble determines that its customers, on average, renew their annual membership three times after the first year before terminating their membership. What amount of revenue should Bramble recognize in its first year? Revenue in first yearNate Beggs signs a 1-year contract with BlueBox Video. The terms of the contract are that Nate is required to pay a nonrefundable initiation fee of $100. No annual membership fee is charged in the first year. After the first year, membership can be renewed by paying an annual membership fee of $5 per month. BlueBox determines that its customers, on average, renew their annual membership three times after the first year before terminating their membership. What amount of revenue should BlueBox recognize in its first year?The Bigelow Health Club sells annual memberships to a prestigious club. The terms of the contracts are that customers are required to pay an up-front non-refundable fee of $200, and then a monthly fee of $50, with the first month due immediately, for the year for a total cost of $800 to join the club. On February 1 2024 Bigelow sold 10 memberships. Prepare the journal entry for the sale on Feb 1 and the adjusting entry on Feb 29, 2024 to report revenue. Explain what revenue Bigelow will report in the month, and over the course of the year. Assume that 100% of the members of the Bigelow club renew their memberships for 3 years. How does that change the revenue reported in February?
- Huawey Company, a telco operator, entered into a contract with Badjyang on Feb. 1. 2019. In line with the contract, Badjyang subscribes for a monthly plan for 12 months and in return receives a free handset model 2019. Badjyang monthly fee of P1,800 starting Feb. 28, 2019 The standalone selling price of Huawey handset model 2019 is P6,000 and the monthly plans for P1,500 a month will рay a without the handset. 10. The amount of receivable recorded on Feb. 28, 2019 P1,500 d. P1,800 а. PO с. b. P1,350 11. The total revenue for the period ended Dec. 31, 2019 amounted to: P20,250 d. P27,600 a. PO С. b. Р24,000Pina Universe charges an initial franchise fee of $ 234,000. Upon the signing of the agreement, a payment of $ 26,000 is due. Thereafter, 5 annual payments of $ 41,600 are required. The credit rating of the franchisee is such that it would have to pay interest at 9% to borrow money. The franchise agreement is signed on August 1, 2020, and the franchise commences operation on October 1, 2020. Prepare the journal entries in 2020 for the franchisor under the following assumptions. a. No future services are required by the franchisee once the franchise starts operations. b. The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the franchise. c. The total franchise fee includes training services (with a value of $ 6,900) for the period leading up to the franchise opening and for 2 months following opening* Your answer is incorrect. Gary Smith signs a 1-year contract with Cullumber Video. The terms of the contract are that Gary is required to pay a nonrefundable initiation fee of $108. No annual membership fee is charged in the first year. After the first year, membership can be renewed by paying an annual membership fee of $6 per month. Cullumber determines that its customers, on average, renew their annual membership three times after the first year before terminating their membership. What amount of revenue should Cullumber recognize in its first year? Revenue in first year $ 324
- SmaGlo, Inc., a telecommunications operator, entered into a contract with Kim Dorothy on March 1,20x7. In line with the contract, Kim Dorothy subscribes for SmaGlo's monthly plan for 12 months and in retum Kim Dorothy receives a free Apple I-Phone handset from SmaGlo. Kim Dorothy will pay a monthly fee of P1,200. Kim Dorothy gets the handset immediately after contract signature. Allocate the transaction price to the performance obligations: the allocated transaction price to each performance obligations? answer is P11,520 network service and P2,880 for Apple I-Phone Handset provide solutionCampus Cellular provides cell phones and 1 year of cell service to students for an upfront, nonrefundable fee of $300 and a usage fee of $5 per month. Students may renew the service without paying another upfront fee for each year they are on campus (on average, students renew their service one time). What amount of revenue should Campus Cellular recognize in the first year of the contract?Blossom Snow Removal Ltd. is a residential and commercial snow removal company Blossom signs contracts with customers for snow removal services that start on November 1 and end on March 30. The company starts signing contracts in the month of September for the winter season. Blossom has a year end on December 31 and had the following transactions involving current liabilities during the year: 1 Blossom signs contracts with customers and requests 100% of the contract price as a deposit at the time of signing. The company signed contracts for snow removal totaling $615,000. Based on past history, Blossom estimates that ane third (1/3) of the contract amount is earned by December 31. 2 Blossom has 10 employees, who are on standby in the event it snows. The employees earn gross wages of $125.000 for the year. From this, the company deducted 15% for income taxes, $6,813 in CPP premiums, and $1,975 in El premiums before distributing the pay cheques to the staff. As an employer, Blossom was…
- Flapper Jack's Pancake Restaurants Inc. sells franchises for an initial fee of $38,000 plus operating fees of $700 per month. The initial fee covers site selection, training, computer and accounting software, and on-site consulting and troubleshooting, as needed, over the first five years. On March 15, 2020, Tim Cruise signed a franchise contract, paying the standard $6,400 down with the balance due over five years with interest. Assuming that the initial services to be performed by Flapper Jack's subsequent to the signing are substantial and that collection of the receivable is reasonably assured, the journal entry required at signing would include a credit to: Multiple Choice O Deferred revenue for $38,000. Deferred revenue for $31,600. Franchise fee revenue for $38,000. Franchise fee revenue for $6,400.On November 1, 2021 a customer enters into a contract with MyWatch, Inc. to purchase an eWatch plus a one year internet data plan for the watch for a combined price of $700. Each item may be purchased separately from MyWatch, Inc. The standalone selling price of the eWatch is $500 and the standalone selling price of the one year internet data plan is $300. The customer pays MyWatch, Inc. $400 when the contract is signed. MyTWatch, Inc. bills the remaining $300 balance evenly over the contract period of one year. What is the correct accounting for the sale of the ewatch and the data plan? Question 19 options: a) MyWatch would record unearned revenue of $200 when the customer takes control of the ewatch. b) MyWatch would record sales revenue of $500 when the customer takes control of the ewatch. c) MyWatch would recored sales revenue of $438 when the customer takes control of the ewatch.…Campus Cellular provides cell phones and 1 year of cell serviceto students for an upfront, nonrefundable fee of $300 anda usage fee of $5 per month. Students may renew the servicefor each year they are on campus (on average, students renewtheir service one time). What amount of revenue shouldCampus Cellular recognize in the first year of the contract?