A New York City daily newspaper called “Manhattan Today” charges
an annual subscription fee of $135. Customers prepay their
subscriptions and receive 260 issues over the year. To attract more
subscribers, the company offered new subscribers the ability to pay
$130 for an annual subscription that also would include a coupon to
receive a 40% discount on a one-hour ride through Central Park in a
horse-drawn carriage. The list price of a carriage ride is $125 per
hour. The company estimates that approximately 30% of the coupons
will be redeemed.
Required:
1. How much revenue should Manhattan Today
recognize upon receipt of the $130 subscription price?
2. How many performance obligations exist in this
contract?
3. Prepare the journal entry to recognize sale of
10 new subscriptions, clearly identifying the revenue or deferred
revenue associated with each performance obligation.
1 | |||
Revenue = $0 | |||
2 | |||
Number of performance obligations = 2 | |||
3 | |||
General Journal | Debit | Credit | |
Cash | 1300 | ||
Deferred revenue—subscription | 1170 | =1300*90% | |
Deferred revenue—discount coupon | 130 | =1300*10% | |
Workings: | |||
Standalone selling price of coupon | 15 | =125*40%*30% | |
Standalone selling price of subscription | 135 | ||
Total of standalone prices | 150 | ||
Percentage allocated to—subscription | 90% | =135/150 | |
Percentage allocated to—discount coupon | 10% | =15/150 |
A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $135....
9)A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $108. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $100 per hour. The company...
A New York City daily newspaper called "Manhattan Today charges an annual subscription fee of $432. Customers prepay their subscriptions and receive 230 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $410 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $400 per hour. The company...
A New York City daily newspaper called "Manhattan Today" charges an annual subscription fee of $138. Customers prepay their subscriptions and receive 230 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $125 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $100 per hour. The company...
A New York City daily newspaper called "Manhattan Today" charges an annual subscription fee of $108. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $100 per hour. The company...
How to answer this question A New York City daily newspaper called "Manhattan Today" charges tomers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $130 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates...
A New York City daily newspaper called "Manhattan Today" charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Required: 1. Assume...
A9 ху Credit A New York City daily newspaper called "Manhattan Today" charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $125 per hour. The company estimates that approximately 30% of the coupons will be redeemed....
Exercise 6-7 (Algo) Performance obligations; customer option for additional goods or services; prepayment (LO6-3, 6-4, 6-5] A New York City daily newspaper called "Manhattan Today” charges an annual subscription fee of $540. Customers prepay their subscriptions and receive 270 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $510 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in...