A New York City daily newspaper called âManhattan Todayâ chargesan annual subscription fee of $108. Customers prepay theirsubscriptions and receive 220 issues over the year. To attract moresubscribers, the company offered new subscribers the ability to pay$110 for an annual subscription that also would include a coupon toreceive a 40% discount on a one-hour ride through Central Park in ahorse-drawn carriage. The list price of a carriage ride is $100 perhour. The company estimates that approximately 30% of the couponswill be redeemed.
Required:
1. How much revenue should Manhattan Todayrecognize upon receipt of the $110 subscription price?
2. How many performance obligations exist inthis contract?
3. Prepare the journal entry to recognize sale of 11 newsubscriptions, clearly identifying the revenue or unearned revenueassociated with each performance obligation. (If no entryis required for a transaction/event, select "No journal entryrequired" in the first account field.)
A New York City daily newspaper called âManhattan Todayâ chargesan annual subscription fee of $108. Customers prepay theirsubscriptions and receive 220 issues over the year. To attract moresubscribers, the company offered new subscribers the ability to pay$110 for an annual subscription that also would include a coupon toreceive a 40% discount on a one-hour ride through Central Park in ahorse-drawn carriage. The list price of a carriage ride is $100 perhour. The company estimates that approximately 30% of the couponswill be redeemed. |
| Required: |
| 1. | How much revenue should Manhattan Todayrecognize upon receipt of the $110 subscription price? |
| 2. | How many performance obligations exist inthis contract? |
| 3. | Prepare the journal entry to recognize sale of 11 newsubscriptions, clearly identifying the revenue or unearned revenueassociated with each performance obligation. (If no entryis required for a transaction/event, select "No journal entryrequired" in the first account field.) |
Related questions
A New York City daily newspaper called âManhattan Todayâ chargesan annual subscription fee of $270. Customers prepay theirsubscriptions and receive 280 issues over the year. To attract moresubscribers, the company offered new subscribers the ability to pay$260 for an annual subscription that also would include a coupon toreceive a 40% discount on a one-hour ride through Central Park in ahorse-drawn carriage. The list price of a carriage ride is $250 perhour. The company estimates that approximately 30% of the couponswill be redeemed. |
| Required: |
| 1. | How much revenue shouldManhattan Today recognize upon receipt of the $260 subscriptionprice? |
Answer: No Revenue Recognize
| 2. | How many performanceobligations exist in this contract? |
Answer: 2
| 3. | Prepare the journal entry to recognize sale of 10 newsubscriptions, clearly identifying the revenue or unearned revenueassociated with each performance obligation. (If no entryis required for a transaction/event, select "No journal entryrequired" in the first account field.) |
| Answer: |
Credit. Deferred Revenue--Subscription [ ? ] Credit. Deferred Revenue--Coupon [ ? ] Show Steps please |
