P5-2 is the problem im having trouble with. Its on two pages.
ments in classes as part a. How many performance obligations are included in the b. How much of the contract price would be allocated to each performance obligation? Expl c. Prepare the journal entry to recognize revenue for the sale of a new membership. Clearly id or deferred revenue associated with each performance obligation Assume F&S offers a "Fit 50" coupon book with 50 prepaid visits over the next year. F&S has it 50 purchasers make an average of 40 visits before the coupon book expires. A customerped thau Fit the book is 50 book by paying $500 in advance, and for any additional visits over 50 during the year after t purchased, the customer can pay a $15 visitation fee per visit. F&S typically charges $15 to nonme use the facilities for a single day. a. H ow many separate performance obligations are included in the Fit 50 member deal? Explain b. How much of the contract price would be allocated to each separate performance obligation? Explain answer. c. Prepare the journal entry to recognize revenue for the sale of a new Fit 50 book. P 5-2 Performance obligations Creative Computing sells a tablet computer called the Protab. The $780 sales price of a Protab Package include the following: One Protab computer. on.A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to LO5-2, LO5-4 LO5-5 repairs or replacements associated with defective products for up to six months. A coupon to purchase a Creative Probook e-book reader for $200, a price that represents a 50% discount from the regular Probook price of $400. It is expected that 20% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $50. Customers can buy the extend 50 at other times as well. Creative estimates that 40% of customers will purchase an extended warranty. Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $760. Required I. How many performance obligations are included in a Protab Package? Explain your answer CHAPTER 5 Revenue Recognition 285 2. List the performance obligations in the Protab Package in the following table, and complete it to allocate t transaction price of 100,000 Protab Packages to the performance obligations in the contract. Stand-alone Percentage of the sum of the stand-alone selling prices of the performance obligationstransaction price to the Allocation of total selling price of the performance obligation: obligation: (to two decimal places): performance obligation: 3. Prepare a journal entry to record sales of 100,000 Protab Packages (ignore any sales of extended warranties). they don't purchase it with the $50 coupon that was included in the Protab Package. Creative estimates that 40% of customers will use the $50 coupon to purchase an extended warranty. Complete the same requirements as Assume the same facts as in PS-2, except that customers must pay $75 to purchase the extended warranty if P5-3 Performance obligations; warranties; option LO5-2, L05-4 in P5-2. LO5-5 P5-4 Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and doalty nrogram through which qualifying customers can
