Question
PART A Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling SunBoots to customers for $70 per
PART A
Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling SunBoots to customers for $70 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any additional future purchases made in the next 30 days. Customers cant obtain the discount coupon otherwise. Clarks anticipates that approximately 20% of customers will utilize the coupon, and that on average those customers will purchase additional goods that normally sell for $110. Required: 1. How many performance obligations are in a contract to buy a pair of SunBoots? 2. Prepare a journal entry to record revenue for the sale of 1,500 pairs of SunBoots, assuming that Clarks uses the residual method to estimate the stand-alone selling price of SunBoots sold without the discount coupon.
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PART B
On May 1, 2018, Varga Tech Services signed a $93,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2018, to April 30, 2019, with Shaffer paying the entire $93,000 on May 1, 2018.
How much revenue should Varga recognize in 2018?
Revenue __________??
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