Allocating a Transaction Price and Recording Revenue and Cost of Revenue A retailer initiates an advertising campaign, which allows a customer to receive a coupon for a free gaming system DVD with the purchase of three gaming system DVDs in a single purchase for $75 (3 x $25). To receive the free gaming system DVD coupon, the customer fills out a request form and mails it to the retailer prior to the expiration date. The retailer estimates, based on recent experience with similar promotions, that 80% of the customers will complete the mail-in rebate required to receive the free gaming system DVD. The cost of the DVD to the retailer is $18, and its standalone selling price is $25, a. How is the consideration allocated to the performance obligations in the revenue contract? Note: Round the allocated transaction prices to two decimal places. Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations as Stated (rounded) DVD 0$ 0$ Coupon Offer 0 0 0 $ 0 Price 0 0 b. Prepare the journal entry for sales and cost of sales for 40 sales transactions in which 3 gaming system DVDs were sold as part of each transaction. Round to the nearest dollar. Note: List multiple debits or credits (when applicable) in alphabetical order according to the first letter of the account name. Note: Round amounts to the nearest whole dollar. Account Name Dr. Cr. 0 0 0 0 0 0 To record sales. 0 0 0 0 To record cost of sales. C. Assume the retailer has no past experience to estimate the amount of redemption. (1) Show how the consideration is allocated to the performance obligations in the revenue contract. Note: Round the allocated transaction prices to two decimal places. Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations as stated Price (rounded) DVD 0$ 0$ 0 Coupon Offer 0 0 0 0 $ 0 $ 0 (2) Prepare the journal entry for sales and cost of sales for 40 sales transactions in which 3 gaming system DVDs were sold as part of each transaction. Note: List multiple debits or credits (when applicable) in alphabetical order according to the first letter of the account name. . Note: Round amounts to the nearest whole dollar, Account Name Dr. Cr. 0 0 0 0 0 To record sales 0 0 0 0 To record cost of sales, Please answer all parts of the question, Allocating a Transaction Price and Recording Revenue and Cost of Revenue A retailer initiates an advertising campaign, which allows a customer to receive a coupon for a free gaming system DVD with the purchase of three gaming system DVDs in a single purchase for $75 (3 x $25). To receive the free gaming system DVD coupon, the customer fills out a request form and mails it to the retailer prior to the expiration date. The retailer estimates, based on recent experience with similar promotions, that 80% of the customers will complete the mail-in rebate required to receive the free gaming system DVD. The cost of the DVD to the retailer is $18, and its standalone selling price is $25, a. How is the consideration allocated to the performance obligations in the revenue contract? Note: Round the allocated transaction prices to two decimal places. Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations as Stated (rounded) DVD 0$ 0$ Coupon Offer 0 0 0 $ 0 Price 0 0 b. Prepare the journal entry for sales and cost of sales for 40 sales transactions in which 3 gaming system DVDs were sold as part of each transaction. Round to the nearest dollar. Note: List multiple debits or credits (when applicable) in alphabetical order according to the first letter of the account name. Note: Round amounts to the nearest whole dollar. Account Name Dr. Cr. 0 0 0 0 0 0 To record sales. 0 0 0 0 To record cost of sales. C. Assume the retailer has no past experience to estimate the amount of redemption. (1) Show how the consideration is allocated to the performance obligations in the revenue contract. Note: Round the allocated transaction prices to two decimal places. Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations as stated Price (rounded) DVD 0$ 0$ 0 Coupon Offer 0 0 0 0 $ 0 $ 0 (2) Prepare the journal entry for sales and cost of sales for 40 sales transactions in which 3 gaming system DVDs were sold as part of each transaction. Note: List multiple debits or credits (when applicable) in alphabetical order according to the first letter of the account name. . Note: Round amounts to the nearest whole dollar, Account Name Dr. Cr. 0 0 0 0 0 To record sales 0 0 0 0 To record cost of sales, Please answer all parts of the
