Identifying and Recording Customer Option for Additional Merchandise Pets Inc launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35 discount on a future purchase of $30 or more There is a limit of one coupon per customer Pets Inc estimates that 28 of customers receiving the coupon will redeem the coupon on an average purchase of $40 Sales on the first day of the one week promotional period totaled $200,000 resulting in 2,000 coupons distributed Assume all sales were cash sales Cost of sales is 45 of the selling price a Determine how many performance obligations are included in a sales transaction during the advertising promotion program Assume that coupons readily available to the public online or in company fliers have a maximum value of 20 off a purchase of $30 or more AnswerOne performance obligationTwo performance obligationsThree performance obligationsFour performance obligationsNo performance obligations b Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices Note Round each allocated transaction price to the nearest whole dollar Performance Obligations Transaction Price As Stated Standalone Selling Price Allocated Transaction Price (rounded) Merchandise Answer Answer Answer Customer option merchandise credit Answer Answer Answer Answer Answer Answer Account Name Dr Cr AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer Sales Revenue Answer Answer To record the sale of merchandise AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer To record the cost of sale of merchandise c Only 25 of the coupons were redeemed during the redemption period on qualifying purchases of $18,500 Record the entry for the redemption of the coupons, ignoring the cost entries Account Name Dr Cr AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer Sales Revenue Merchandise Credit Answer Answer AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer d If the coupon offered were instead 20 on purchases of $30 or more (otherwise, same facts as before), how would the answers change to parts a and b, if at all Account Name Dr Cr AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer To record the sale of merchandise AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN A Answer Answer To record the cost of sale of merchandise ANSWER CHOICES Identifying and Recording Customer Option for Additional Merchandise Pets Inc launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35 discount on a future purchase of $30 or more There is a limit of one coupon per customer Pets Inc estimates that 28 of customers receiving the coupon will redeem the coupon on an average purchase of $40 Sales on the first day of the one week promotional period totaled $200,000 resulting in 2,000 coupons distributed Assume all sales were cash sales Cost of sales is 45 of the selling price a Determine how many performance obligations are included in a sales transaction during the advertising promotion program Assume that coupons readily available to the public online or in company fliers have a maximum value of 20 off a purchase of $30 or more b Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices Note Round each allocated transaction price to the nearest whole dollar Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations As Stated Price (rounded) Merchandise SOSOS Customer option merchandise credit S 0S 0S 0 Account Name Dr Cr Sales Revenue To record the sale of merchandise To record the cost of sale of merchandise c Only 25 of the coupons were redeemed during the redemption period on qualifying purchases of $18,500 Record the entry for the redemption of the coupons, ignoring the cost entries Account Name Dr Cr Sales Revenue Merchandise Credit d If the coupon offered were instead 20 on purchases of $30 or more (otherwise, same facts as before), how would the answers change to parts a and b, if at all Account Name Dr Cr To record the sale of merchandise To record the cost of sale of merchandise Cash Accounts Receivable Td Due from Consignee Inventory Prepaid expense Contract Asset Prepaid Advertising Expense Accounts Payable Consideration Payable Deferred Revenue Sales Revenue Merchandise Credit Sales Revenue Unused Merchandise Credit d Service Revenue Commission Revenue Cost of Goods Sold Advertising Expense Interest Expense Sales Commission Expense NA To record the cost of sale of merchandise Identifying and Recording Customer Option for Additional Merchandise Pets Inc launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35 discount on a future purchase of $30 or more There is a limit of one coupon per customer Pets Inc estimates that 28 of customers receiving the coupon will redeem the coupon on an average purchase of $40 Sales on the first day of the one week promotional period totaled $200,000 resulting in 2,000 coupons distributed Assume all sales were cash sales Cost of sales is 45 of the selling price a Determine how many performance obligations are included in a sales transaction during the advertising promotion program Assume that coupons readily available to the public online or in company fliers have a maximum value of 20 off a purchase of $30 or more b Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices Note Round each allocated transaction price to the nearest whole dollar Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations As Stated Price (rounded) Merchandise SOSOS Customer option merchandise credit S 0S 0S 0 Account Name Dr Cr Sales Revenue To record the sale of merchandise To record the cost of sale of merchandise c Only 25 of the coupons were redeemed during the redemption period on qualifying purchases of $18,500 Record the entry for the redemption of the coupons, ignoring the cost entries Account Name Dr Cr Sales Revenue Merchandise Credit d If the coupon offered were instead 20 on purchases of $30 or more (otherwise, same facts as before), how would the answers change to parts a and b, if at all Account Name Dr Cr To record the sale of merchandise To record the cost of sale of merchandise Cash Accounts Receivable Td Due from Consignee Inventory Prepaid expense Contract Asset Prepaid Advertising Expense Accounts Payable Consideration Payable Deferred Revenue Sales Revenue Merchandise Credit Sales Revenue Unused Merchandise Credit d Service Revenue Commission Revenue Cost of Goods Sold Advertising Expense Interest Expense Sales Commission Expense NA To record the cost of sale of merchandise

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Identifying and Recording Customer Option for Additional Merchandise Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon

Identifying and Recording Customer Option for Additional Merchandise

Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase of $30 or more. There is a limit of one coupon per customer. Pets Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $40. Sales on the first day of the one-week promotional period totaled $200,000 resulting in 2,000 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price.

a.Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum value of 20% off a purchase of $30 or more. AnswerOne performance obligationTwo performance obligationsThree performance obligationsFour performance obligationsNo performance obligations

b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices. Note: Round each allocated transaction price to the nearest whole dollar.

Performance Obligations	Transaction Price As Stated	Standalone Selling Price	Allocated Transaction Price (rounded)
Merchandise	Answer	Answer	Answer
Customer option - merchandise credit	Answer	Answer	Answer
	Answer	Answer	Answer

Account Name	Dr.	Cr.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
Sales Revenue	Answer	Answer
To record the sale of merchandise.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the cost of sale of merchandise.

c. Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of $18,500. Record the entry for the redemption of the coupons, ignoring the cost entries

Account Name	Dr.	Cr.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
Sales Revenue-Merchandise Credit	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer

d. If the coupon offered were instead 20% on purchases of $30 or more (otherwise, same facts as before), how would the answers change to parts a and b, if at all?

Account Name	Dr.	Cr.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the sale of merchandise.
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
AnswerCashAccounts ReceivableDue from ConsigneeInventoryPrepaid expenseContract AssetPrepaid Advertising ExpenseAccounts PayableConsideration PayableDeferred RevenueSales RevenueMerchandise CreditSales RevenueUnused Merchandise CreditService RevenueCommission RevenueCost of Goods SoldAdvertising ExpenseInterest ExpenseSales Commission ExpenseN/A	Answer	Answer
To record the cost of sale of merchandise.

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ANSWER CHOICES:

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Identifying and Recording Customer Option for Additional Merchandise Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase of $30 or more. There is a limit of one coupon per customer. Pets Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $40. Sales on the first day of the one-week promotional period totaled $200,000 resulting in 2,000 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price. a.Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum value of 20% off a purchase of $30 or more. b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices. Note: Round each allocated transaction price to the nearest whole dollar. Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations As Stated Price (rounded) Merchandise SOSOS Customer option - merchandise credit S 0S 0S 0 Account Name - Dr. Cr. Sales Revenue To record the sale of merchandise. To record the cost of sale of merchandise c Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of $18,500. Record the entry for the redemption of the coupons, ignoring the cost entries Account Name Dr. Cr Sales Revenue-Merchandise Credit d. If the coupon offered were instead 20% on purchases of $30 or more (otherwise, same facts as before), how would the answers change to parts a and b, if at all? Account Name Dr. Cr. To record the sale of merchandise. To record the cost of sale of merchandise Cash Accounts Receivable Td Due from Consignee Inventory Prepaid expense Contract Asset Prepaid Advertising Expense Accounts Payable Consideration Payable Deferred Revenue Sales Revenue-Merchandise Credit Sales Revenue-Unused Merchandise Credit d. Service Revenue Commission Revenue Cost of Goods Sold Advertising Expense Interest Expense Sales Commission Expense NA To record the cost of sale of merchandise Identifying and Recording Customer Option for Additional Merchandise Pets Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase of $30 or more. There is a limit of one coupon per customer. Pets Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $40. Sales on the first day of the one-week promotional period totaled $200,000 resulting in 2,000 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price. a.Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum value of 20% off a purchase of $30 or more. b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices. Note: Round each allocated transaction price to the nearest whole dollar. Transaction Standalone Allocated Performance Price Selling Transaction Price Obligations As Stated Price (rounded) Merchandise SOSOS Customer option - merchandise credit S 0S 0S 0 Account Name - Dr. Cr. Sales Revenue To record the sale of merchandise. To record the cost of sale of merchandise c Only 25% of the coupons were redeemed during the redemption period on qualifying purchases of $18,500. Record the entry for the redemption of the coupons, ignoring the cost entries Account Name Dr. Cr Sales Revenue-Merchandise Credit d. If the coupon offered were instead 20% on purchases of $30 or more (otherwise, same facts as before), how would the answers change to parts a and b, if at all? Account Name Dr. Cr. To record the sale of merchandise. To record the cost of sale of merchandise Cash Accounts Receivable Td Due from Consignee Inventory Prepaid expense Contract Asset Prepaid Advertising Expense Accounts Payable Consideration Payable Deferred Revenue Sales Revenue-Merchandise Credit Sales Revenue-Unused Merchandise Credit d. Service Revenue Commission Revenue Cost of Goods Sold Advertising Expense Interest Expense Sales Commission Expense NA To record the cost of sale of merchandise