Question
On April 1, 2020, Tulane Electronics enters into a contract to sell XPS computers to Precision Equipment at $100,000, which is also the stand-alone selling
On April 1, 2020, Tulane Electronics enters into a contract to sell XPS computers to Precision Equipment at $100,000, which is also the stand-alone selling price of the computers. Tulane will receive cash payment immediately. Delivery is scheduled for May 1, 2020. As part of the contract, Tulane offers a 30% discount coupon to Precision for any purchases in the next year. Precision also offers a 5% discount on all sales to all customers. Based on experience, Tulane estimates a 20% probability that Precision will redeem the coupon, and that the coupon will be applied to $60,000 of purchases. How much unearned revenue (rounded to the next thousand) will Tulane Electronics record for the offering of coupons?
| a. | $0 | |
| b. | $3,000 | |
| c. | $60,000 | |
| d. | $97,000 | |
| e. | $100,000 |
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