Question
a . Organic Foods Inc. required an advance payment of $20 on March 1, 2020, from a customer for a customized fruit basket. The customer
a. Organic Foods Inc. required an advance payment of $20 on March 1, 2020, from a customer for a customized fruit basket. The customer picked up the basket on March 5, 2020, and paid the remaining balance of $30. Determine the amount of revenue that Organic Foods Inc. would record on March 1, 2020, and March 5, 2020.
Revenue to recognize on March 1, 2020:
Revenue to recognize on March 5, 2020:
b. Eagle Inc. sold apparel to customers in May of 2020 for $40,000. At the point of sale, Eagle Inc. provided customers 400 coupons for 30% off purchases in June and July of 2020. The coupon is considered a separate performance obligation. Eagle Inc. estimates the standalone selling price of the apparel to be $40,000 and the standalone selling price of the coupons to be $6,000 ($30 estimated coupon value x 200 coupons expected to be redeemed). Determine the amount of revenue that Eagle would record in May for the sale of apparel, and the amount of revenue deferred for the customer options (coupon promotion).
Revenue to recognize in May for the sale of apparel:
Revenue to defer in May for the customer options:
a. Organic Foods Inc. required an advance payment of $20 on March 1, 2020, from a customer for a customized fruit basket. The customer picked up the basket on March 5, 2020, and paid the remaining balance of $30. Determine the amount of revenue that Organic Foods Inc. would record on March 1, 2020, and March 5, 2020.
Revenue to recognize on March 1, 2020:
Revenue to recognize on March 5, 2020:
b. Eagle Inc. sold apparel to customers in May of 2020 for $40,000. At the point of sale, Eagle Inc. provided customers 400 coupons for 30% off purchases in June and July of 2020. The coupon is considered a separate performance obligation. Eagle Inc. estimates the standalone selling price of the apparel to be $40,000 and the standalone selling price of the coupons to be $6,000 ($30 estimated coupon value x 200 coupons expected to be redeemed). Determine the amount of revenue that Eagle would record in May for the sale of apparel, and the amount of revenue deferred for the customer options (coupon promotion).
Revenue to recognize in May for the sale of apparel:
Revenue to defer in May for the customer options:
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Computer Accounting
Authors: Donna Kay
15th Edition
0077826841, 9780077826840
